FTX co-founder Gary Wang avoided prison time Wednesday, sentenced to time served and three years of supervised release for his role in the crypto exchange’s collapse.
“You did the right thing,” U.S. District Judge Lewis Kaplan told Wang, according to a post on Twitter (aka X) from Inner City Press. “I don’t think I need to say much about the extent of your cooperation. You are entitled to a world of credit.”
Wang, who met FTX co-founder and former CEO Sam Bankman-Fried at a math camp in high school, served as a key witness in Bankman-Fried’s criminal case. Just over a year ago, Wang testified about how billions of dollars in customer funds were siphoned from the exchange by FTX’s sister trading firm, Alameda Research, using a virtually unlimited line of credit.
Judge Kaplan: You did the right thing for yourself, and the right thing for the country. If this wasn’t the biggest financial fraud in US history, it was certainly among the biggest 2 or 3. It is the judgment of this court that you be committed to time served
— Inner City Press (@innercitypress) November 20, 2024
At the same time, Wang revealed changes to FTX’s codebase that gave Alameda special privileges, such as an “allow_negative” balance feature. That enabled Alameda to make unlimited withdrawals from FTX, including assets borrowed from the exchange.
Alongside Alameda’s ex-CEO Caroline Ellison, Wang flipped on Bankman-Fried following the exchange’s unraveling two years ago. Both agreed to cooperate with prosecutors’ investigation into the exchange’s collapse, pleading guilty early on in hopes of a lighter sentence. At the time, Wang pleaded guilty to four felony counts of fraud and conspiracy.
On Tuesday, Assistant United States Attorney Nicolas Roos described Wang’s cooperation as pivotal. Calling Wang one of the easiest cooperators that he’s ever worked with, Roos said that Wang also created an impressive tool for detecting fraud at FTX, per Inner City Press.
Bankman-Fried was sentenced to 25 years in prison in March after being found guilty of seven counts of fraud, money laundering, and conspiracy. Since then, the former crypto mogul has filed an appeal, arguing that he was “presumed guilty” heading into his high-stakes trial.
Wang is the final member of Bankman-Fried’s inner circle to face Judge Kaplan for sentencing. In September, Ellison received a two-year prison sentence while agreeing to forfeit $11 billion, while FTX engineering chief Nishad Singh avoided prison time in October.
Throughout the sentencing of Bankman-Fried’s inner circle, cooperation with prosecutors was weighed by Judge Kaplan as a significant factor. Meanwhile, Ryan Salame, co-CEO of FTX Digital Markets, who never testified, was sentenced in May to seven-and-a-half years.
According to Inner City Press, Wang has left the crypto industry behind and is expecting his first child. At the same time, the FTX co-founder expressed a sense of remorse for his involvement in the exchange, apologizing during Wednesday’s hearing.
“I am deeply sorry to all the customers and investors in FTX who trusted us,” he said. “There are so many things I could have done.”
Edited by Andrew Hayward
