Crypto-Friendly Legislation: Illegal Support Gets FTX Exec 7 Years
Ryan Salame, the former co-CEO of a Bahamian subsidiary of cryptocurrency exchange platform FTX, was sentenced to 90 months in prison. He faced accusations of using the platform’s customer funds as campaign donations for candidates who support crypto-friendly legislation.
On Tuesday, May 28, 2024, Salame, who also served as a top lieutenant to Sam Bankman-Fried, the platform’s founder, was sentenced. Furthermore, He pleaded guilty to illegally donating tens of millions of dollars to political campaigns.
The ex-co-CEO follows in the footsteps of superior Bank-Fried, who was found guilty earlier this year of related charges. He was sentenced to 25 years in prison for stealing $8 million from FTX customers. Charges included seven fraud and conspiracy counts. Prosecutors called the case “one of the biggest financial frauds in U.S. history.
Reports state that Salame worked alongside FTX engineering chief Nishad Singh to donate customer funds to political campaigns supporting crypto-friendly legislation.
Salame Goes Down for Illegally Supporting Crypto-Friendly Legislation
The court sentenced 30-year-old Salame to 90 months in prison, equating to a seven-and-a-half-year term. He will then undergo three years of supervised release. The ex-co-CEO received orders to pay over $6 million for his wrongdoing and over $5 million to cover damages.
Damian Williams, U.S. Attorney for the Southern District of New York, indicated that the crime undermines trust in America’s government on several levels. “Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system,’ he said.
Federal Election Commission data indicates that Salame contributed over $24 million to Republican candidates and causes during the 2022 election cycle. As a result, his contributions earned him recognition as one of the top donors of the year.
The former co-CEO pleaded guilty to one count of conspiracy to make unlawful political contributions. Additionally, he admitted guilt to one count of conspiracy to operate an unlicensed money-transmitting business.
Other News in Crypto-Friendly Legislation
Salame’s arrest comes as other crypto-friendly legislation is making news. The House recently passed the “Financial Innovation and Technology for the 21st Century Act.”
The law classifies Bitcoin and other forms of cryptocurrency as commodities rather than securities, placing them under the regulation of the Commodity Futures Trading Commission. Previously, the cryptocurrency fell under the Securities Exchange Commission’s jurisdiction, which intensified scrutiny of the industry under the Biden administration.
Trump and Republican lawmakers support the bill. They feel it will clarify regulations for digital assets. Rep. French Hill, R-Ark, has called it “the most substantial piece of digital asset legislation in Congress’s history.”
The Meaning of the Legislation in the Biden – Trump Campaign
The Security Exchange Commission (SEC) has launched a campaign to charge crypto companies with regulation violations. Trump has used these attacks to support his campaign. During a Mar-A-Lago dinner, he told crypto backers they “better vote” for him based on his support of moving regulation to the Commodity Futures Trading Commission.
SEC Chair Gary Gensler opposed the new crypto-friendly regulation. He said it would allow crypto issuers to self-certify their classification as a commodity rather than a security when issuing crypto. The SEC would have a limited 60-day window to review the classification, creating opportunities for illicit activity.
Trump’s campaign began accepting crypto donations when the bill passed the House vote. He is urging supporters to “build a crypto army.” However, the bill has not yet passed the Democratic-controlled Senate.
Eight House Democrats support the bill and have encouraged their Senate colleagues to follow suit. Majority leader Chuck Schumer, D-NY, and 11 other Senate Democrats split with Biden, supporting the crypto-friendly legislation. Biden has said he will veto the bill if it reaches his desk.