FTX co-founder won’t serve time in prison, judge rules
Prosecutors argued that FTX co-founder Gary Wang cooperated in their case against former FTX CEO Sam Bankman-Fried
Tada Images/Shutterstock modified by Blockworks
Former top FTX executive Gary Wang was sentenced to time served with three years of supervised release Wednesday for his role in the $8 billion fraud that preceded the exchange’s collapse. Wang is the final cooperating member of FTX founder Sam Bankman-Fried’s inner circle to be sentenced.
Wang, co-founder and former chief technology officer of FTX, served as a government witness in Bankman-Fried’s criminal trial last fall. He was the first co-conspirator to work with prosecutors and pleaded guilty to four counts of fraud and conspiracy in December 2022.
“You immediately did the right thing,” Judge Lewis Kaplan said Wednesday, addressing Wang. “You are entitled to a world of credit.”
While Wang does bear some responsibility for his role in the crimes, Kaplan added, his culpability is minimal compared to other defendants. “Life is a balance,” and cooperation should be rewarded, Kaplan said.
Wang’s parents and wife, who is expecting their first child, were present in the courtroom Wednesday.
Prosecutors and Wang’s team previously asked the judge to sentence Wang to time served.
Read more: Remembering FTX: How the collapse shaped crypto’s future
Wang’s assistance, prosecutors said, was not only instrumental in their case against Bankman-Fried but will help bring down more criminals in the future.
“Wang has built an interface that the Government has begun using for detecting potential fraud by publicly traded companies,” prosecutors wrote in a Nov. 13 note to the court.
Should Wang avoid jail time, prosecutors said he agreed to continue working on an additional “tool for detection of potential illegal activity in cryptocurrency markets.”
Last fall, Wang testified that at Bankman-Fried’s direction, he wrote the code that allowed Alameda’s “unlimited withdrawals” from FTX. The excessive line of credit ultimately culminated in an $8 billion hole in the exchange’s books.
“We gave special privileges to Alameda Research on FTX,” Wang said during Bankman-Fried’s trial. “And we lied about this to the public.”
Wang’s attorneys said he was unaware Alameda was using the tool to take FTX customer money.
“As the Government has recognized, Gary first learned of the fraud after it was well underway having been lied to and deceived by Sam Bankman-Fried,” they wrote in a Nov. 6 filing. “Gary is profoundly remorseful and has taken extraordinary steps to assist the Government and others working on behalf of FTX victims.”
Wang is the third and final government witness to be sentenced. Caroline Ellison, former CEO of Alameda Research and Bankman-Fried’s on-again-off-again girlfriend, was sentenced to two years in prison in September. Fellow top advisor Nishad Singh last month was sentenced to time served with three years of supervised release.
Updated Nov. 20, 2024 at 10:49 am ET: Added quotes from Judge Lewis Kaplan.
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