Ryan Salame, the former CEO of FTX Digital Markets, says he had nothing to do with the massive fraud that lost the exchange’s customers over $10 billion—and his “best friend” Sam Trabucco, who once led Alameda Research, has attested to that in writing.
In a Tuesday court filing, Salame’s lawyers argued that their client was “not part of Sam Bankman-Fried’s innermost circle” who knew about the fraud at the center of the case. They compiled letters from Salame’s friends and family attesting to his “generous” and “caring” nature.
“Simply put, Ryan is my best friend,” Trabbuco wrote in a letter to Judge Lewis Kaplan. “He has also committed crimes. He's acknowledged that and is prepared to accept the consequences.”
In September, Salame became one of many FTX leaders to enter a plea deal with the Department of Justice (DOJ) following the exchange’s downfall, forfeiting $1.5 billion in the process. That guilty plea related to campaign finance violation charges rather than fraud, however, and Trabuco said his friend’s punishment should fairly reflect that.
“Ryan doesn't deserve to be defined by his worst actions,” he said. “He's a complex person who made mistakes, not some one-dimensional villain.”
Troy Tsui, another friend and former co-worker of Salame’s at Alameda Research, backed the latter’s “fundamentally decent” character. Another letter from his mom and dad said that “at his core, Ryan seeks to be a catalyst for good in the lives of others.”
Going beyond Salame’s character, lawyers noted how even Caroline Ellison—the CEO of Alameda Research and Bankman-Fried’s ex-girlfriend—testified at the latter’s fraud trial that they had “conspired to keep Ryan in the dark about their fraud.”
While on the witness stand speaking against her former partner, Ellison said that she “knew that FTX could not meet all withdrawals” during the week of its collapse. However, Bankman-Fried instructed her to tell Salame then that “we can meet a ton, though it’s already getting large.”
Salame’s legal team also cited a letter from the Securities Commission of the Bahamas stating that he was the first to inform the commission that client assets at FTX had been transferred to Alameda Research.
“The Commission understood Mr. Salame as advising… that such transfers were not allowed and therefore may constitute misappropriation, theft, fraud or some other crime,” the commission stated. The only people with the power to move funds like that, according to Salame, were Bankman-Fried, engineering director Nishad Singh, and FTX co-founder Gary Wang.
“For the reasons stated above, a sentence of no more than 18 months’ imprisonment is sufficient,” Salame’s lawyers concluded.
His sentencing hearing is scheduled for May 28.
Edited by Ryan Ozawa.