May 16, 2024
Sam Trabucco Stays Low After FTX Collapse
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Sam Trabucco Stays Low After FTX Collapse

Sam Trabucco, former co-CEO of Alameda Research, has appealed for leniency in the sentencing of former FTX Digital Markets co-CEO Ryan Salame. Trabucco, who left Alameda before the collapse of the FTX cryptocurrency exchange and subsequent criminal charges against many executives, made this plea in a character reference letter dated May 6.

The letter was filed with a sentencing recommendation in the United States District Court for the Southern District of New York. Sam Trabucco emphasized that Salame was his best friend and deserved “fair” consequences for his role in misappropriating FTX user funds. He highlighted their shared experiences in the crypto space and their work with former FTX CEO Sam “SBF” Bankman-Fried.

Salame’s Guilty Plea and Personal Circumstances

In September 2023, Salame admitted guilty to charges of conspiracy to operate an unlicensed money transmitting business and engaging in campaign finance fraud, specifically related to contributions to his girlfriend Michelle Bond’s congressional campaign. Sam Trabucco mentioned that Bond and Salame now share a son, and he expressed concern that imprisonment could negatively affect Salame’s family relationship. Trabucco stated,

“Ryan deserves to face the consequences of his actions — he intimately understands that. All I want is for those consequences to be fair — for him, but also for the world, which will be so much worse off not having him fully in it.”

Source: Courtlistener

Trabucco joined Alameda as a trader in 2019 and became co-CEO with Caroline Ellison in 2021 before resigning in August 2022. Unlike Salame, FTX co-founder Gary Wang, former FTX engineering director Nishad Singh, and Ellison, Trabucco has not faced criminal charges from U.S. authorities. Bankman-Fried was the only executive to plead not guilty and go to trial, while others accepted plea deals. The extent of prison time for executives other than SBF remains uncertain.

Sentencing Recommendations and Legal Proceedings

On May 14, Salame’s legal team proposed that the former FTX executive should serve no more than 18 months in prison. At the time of writing, the prosecution had yet to file its recommendation. Judge Lewis Kaplan, who presided over SBF’s criminal trial, will oversee Salame’s sentencing hearing on May 28.

Before Bankman-Fried’s resignation and FTX’s bankruptcy filing, Salame reported the exchange’s fraudulent activities to the Securities Commission of the Bahamas. This led to SBF’s extradition to the United States, where he was charged and convicted of seven felony counts. In March, Judge Kaplan sentenced Bankman-Fried to 25 years in prison, and his lawyers have filed an appeal.

Image by Tung Lam from Pixabay

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