Ryan Salame’s sentencing provides a glimpse into the potential consequences awaiting Sam Bankman-Fried’s inner circle, which includes his on-off girlfriend Caroline Ellison and head of engineering Nishad Singh.

Prosecutors sought a five to seven-year sentence for former FTX executive Ryan Salame, while the defense requested just 18 months. However, the final sentence of seven and a half years exceeded even the prosecution's expectations, despite Salame's cooperation in a plea deal against his former boss, Sam Bankman-Fried.

Salame’s lawyers argued he was unaware that FTX, which abruptly stopped withdrawals in November 2022 and declared bankruptcy, was misusing customer funds. They claimed he believed the company’s businesses were “legitimate, solvent and wildly profitable.”

However, Salame faced charges of campaign finance fraud for making substantial donations to politicians using customer funds without their knowledge. He had donated tens of millions to lawmakers to promote FTX's interests and a more relaxed approach to crypto regulation in Washington. Notably, he was one of the largest donors during the 2022 midterm elections, giving $22 million to Republican candidates under the guise of loans from Alameda Research, though he never intended to repay them.

Salame’s harsher sentence, exceeding the prosecution’s request, is significant and may foreshadow the fate of others in SBF’s circle, including Caroline Ellison and Nishad Singh.

In contrast, the judge in Bankman-Fried’s fraud case halved the 50-year sentence prosecutors sought, opting for 25 years. Salame’s harsher punishment underscores the gravity of his actions.

The scandal surrounding FTX’s donations to U.S. politicians has embarrassed many in Washington, prompting calls for the funds to be returned to compensate victims. Even President Joe Biden was implicated, as SBF was a major donor in his 2020 campaign. Many of Salame's donations were made on Bankman-Fried’s behalf, with the true source concealed to avoid disclosure requirements.

Although this detail didn’t influence the judge or jury, a report by FTX’s examiner highlighted Salame’s misuse of funds. Salame has agreed to pay $5.59 million in restitution to FTX’s creditors, including $5 million withdrawn days before the exchange collapsed. He will also surrender his luxurious Bahamian apartment.

Salame had also used FTX assets for lavish purchases, including investments in restaurants and a private jet. The SEC condemned his actions, with U.S. Attorney Damian Williams stating that Salame’s crimes undermined public trust in American elections and financial integrity, warranting severe consequences.

The judge’s decision to exceed prosecutorial recommendations might be influenced by Salame's refusal to testify against SBF during last year’s high-profile trial. Personally, the sentence is particularly harsh for Salame, who has a newborn son. Judge Kaplan likely aimed to prevent Salame from harming crypto investors and to send a strong message to other potential wrongdoers in the industry.

Given that FTX victims will only receive compensation based on November 2022 crypto prices, the extent of satisfaction from this verdict remains uncertain.