Former top Bankman-Fried lieutenant to plead guilty in FTX fraud case

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Former FTX executive Ryan Salame is to plead guilty on Thursday to criminal charges over the collapse of the cryptocurrency exchange, less than a month before the trial against founder Sam Bankman-Fried is set to begin.

Salame, who co-led the exchange’s main Bahamian entity FTX Digital Markets, will appear in Manhattan federal court at 3pm local time, according to people briefed on the agreement.

He would become the fourth former FTX executive to cut a deal with prosecutors, further isolating Bankman-Fried, who has already seen one of his other closest advisers, former FTX executive Caroline Ellison, turn state’s evidence.

In December last year, US attorney Damian Williams for the Southern District of New York announced guilty pleas from Ellison, who led FTX affiliate Alameda Research, and co-founder of FTX Zixiao “Gary” Wang. Both are expected to be key witnesses at Bankman-Fried’s trial.

By February this year, Nishad Singh — former head of engineering at FTX — also entered a guilty plea to charges including three counts of conspiracy to commit fraud.

A lawyer for Salame did not respond to a request for comment. A spokesman for Bankman-Fried declined to comment.

Salame was one of the closest associates of Bankman-Fried, the now-disgraced and former chief executive of the Bahamas-based crypto exchange FTX.

Salame could bolster the criminal case against Bankman-Fried himself, who is expected to go to trial on October 2. 

In the trading shop’s final days late last year, Salame informed Bahamian regulators that FTX customer funds had been used to cover losses at sister trading firm Alameda Research, according to court records in the Caribbean country. 

The allegation led to the appointment of liquidators after triggering a referral to local law enforcement.

Salame, alongside Ellison, Wang and Singh, formed a tight circle of associates that helped run Bankman-Fried’s once formidable crypto empire which enjoyed the backing of blue-chip investors including Sequoia Capital. 

In addition to his role at FTX, Salame bought four restaurants in Lenox, a western town in Massachusetts where the former executive grew up. Bankruptcy filings showed Bankman-Fried’s companies extended loans to his tight circle of executives, including $55mn to Salame. 

Bankman-Fried, who was incarcerated last month after a judge revoked his bail in the face of allegations that he had attempted to intimidate Ellison and other potential witnesses, has repeatedly protested that he is unable to properly prepare for his trial while in jail.