Ryan Salame, a former FTX executive, is set to plead guilty to charges linked to the sweeping fraud case against Sam Bankman-Fried, the founder of the failed cryptocurrency exchange.
Ryan Salame, a former high-ranking executive at the cryptocurrency exchange FTX, is set to plead guilty to criminal charges linked to the sweeping fraud case against Sam Bankman-Fried, FTX’s founder, two people with knowledge of the matter said, a move that raises the pressure on Mr. Bankman-Fried ahead of his trial next month.
A federal court hearing has been scheduled for Thursday afternoon in which Mr. Salame is expected to enter his guilty plea, according to the people and a notice sent out by federal prosecutors. Mr. Salame has been under investigation for campaign finance violations, but it was not immediately clear what charges he faced.
Mr. Salame, 30, who ran FTX’s subsidiary in the Bahamas and was a prolific donor to Republican politicians, is set to become the fourth executive in Mr. Bankman-Fried’s circle of close advisers to admit to criminal conduct since FTX collapsed in November. Three of Mr. Bankman-Fried’s closest colleagues — Nishad Singh, Caroline Ellison and Gary Wang — have already pleaded guilty to fraud charges and agreed to cooperate against him.
Mr. Salame’s plea agreement was earlier reported by Bloomberg.
A spokesman for Mr. Salame did not immediately respond to requests for comment.
FTX filed for bankruptcy in November in a stunning collapse that has become a symbol of crypto industry hubris. With the help of Mr. Salame, Mr. Bankman-Fried had turned FTX into a household name, endorsed by celebrities and politicians. Then the company imploded over a few days, and customers lost more than $8 billion in deposits.
Mr. Bankman-Fried, 31, was arrested in December and charged with seven criminal counts, including wire fraud and securities fraud. He is accused of using billions of dollars in FTX’s customer funds to finance lavish real estate purchases, political donations and investments in other companies. He has pleaded not guilty, and his trial is scheduled to begin on Oct. 3. Last month, Mr. Bankman-Fried’s bail was revoked and he was sent to jail after a judge ruled that he had twice tried to interfere with witnesses in the case.
A spokesman for Mr. Bankman-Fried declined to comment.
For years, Mr. Salame was one of Mr. Bankman-Fried’s top advisers and an enthusiastic public supporter of FTX. A native of the Berkshires, Mr. Salame started working for Mr. Bankman-Fried at Alameda Research, a crypto hedge fund that Mr. Bankman-Fried was running in Hong Kong at the time. When Mr. Bankman-Fried moved FTX to the Bahamas, Mr. Salame was the point person who communicated with the local government.
As FTX grew, Mr. Salame became one of crypto’s wealthiest executives and began using some of his wealth to buy popular restaurants in Lenox, Mass., in the Berkshires. He received $87 million in bonuses and loans from Alameda, according to court records, and was known for his taste for private jets and expensive cars.
Mr. Salame also became active in the Washington political scene, where he styled himself as a “budding Republican megadonor.” He donated $24 million in the 2022 midterm elections, mostly to Republicans, and started dating Michelle Bond, a crypto lobbyist who made a losing bid for Congress as a Republican from Long Island, N.Y.
The implosion of Mr. Bankman-Fried’s business empire turned Mr. Salame into a target for federal prosecutors. In April, the F.B.I. carried out a search at the Potomac, Md., home he shared with Ms. Bond. Agents seized phones belonging to Mr. Salame and Ms. Bond.
Mr. Salame was also directly implicated in the charges against Mr. Bankman-Fried. In legal documents, prosecutors have claimed that Mr. Bankman-Fried enlisted his executives in a “straw donor” scheme to avoid limits on campaign contributions. They said that he recruited the executives as proxies to donate tens of millions of dollars to both parties, effectively on behalf of the company. A revised indictment against Mr. Bankman-Fried identified Mr. Salame’s donations as part of the scheme
Prosecutors eventually dropped the campaign finance charge against Mr. Bankman-Fried, citing procedural issues with his extradition from the Bahamas. But in a court filing last month, the prosecutors said they would use the campaign finance allegations to support the other charges that Mr. Bankman-Fried faces.
Benjamin Weiser contributed reporting. Jack Begg contributed research.
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