- Gary Wang cooperated with prosecutors against Sam Bankman-Fried in 2023.
- He helped prove that Bankman-Fried knew about the "back door" that led to the exchange's collapse.
- Wang is the second former FTX insider to dodge an extended prison sentence.
Gary Wang, the soft-spoken former chief technology officer of failed crypto exchange FTX, was sentenced on Wednesday to time served for his role in the fraud that led to its stunning collapse in 2022.
This means he won’t serve any additional time behind bars in connection to the fraud committed by executives at FTX and its sister company, Alameda Research.
Wang is the second FTX insider to avoid an extended prison sentence. Last month, Judge Lewis Kaplan declined to send Wang’s former colleague Nishad Singh back to prison, citing Singh’s prompt and valuable cooperation with prosecutors.
Kaplan hit that theme again on Wednesday.
“You immediately did the right thing,” the judge said Wednesday, Blockworks reported. “You are entitled to a world of credit.”
Wang pleaded guilty to wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit commodities fraud in 2022.
A year later, Wang became one of several former FTX employees to testify against their former boss. Bankman-Fried was eventually sentenced to 25 years in prison. He is appealing that sentence.
Wang’s testimony was especially important in proving that Bankman-Fried knew about a so-called back door through which Alameda Research, a crypto hedge fund Bankman-Fried also owned, illegally withdrew FTX customer assets.
Prosecutors praised Wang for his cooperation in a memo ahead of Wednesday’s hearing.
“He decided to cooperate immediately, even though he was not involved in many aspects of the criminal enterprise, and there was little documentary evidence linking Wang to the frauds on FTX’s customers and investors,” prosecutors wrote.
Wang’s help didn’t end with his testimony at Bankman-Fried’s trial.
“Gary has worked with the government to design and build a new software tool to detect potential financial fraud in public markets,” Wang’s lawyers wrote in a memo ahead of his sentencing.
The FTX co-founder is also “developing a separate tool focused on identifying illicit activity on crypto exchanges,” they added.
Wang, a maths whiz and coding specialist, is the quiet son of Chinese immigrants. He and Bankman-Fried were roommates at Massachusetts Institute of Technology for three years.
He is the fifth and final former FTX executive to be sentenced in connection with the exchange’s dramatic collapse.
In addition to Bankman-Fried, former executives Ryan Salame, Caroline Ellison, and Nishad Singh pleaded guilty to charges in connection with the collapse.
Salame, the former co-CEO of FTX’s subsidiary in the Bahamas, was sentenced to more than seven years in May.
Despite her extensive cooperation and role as the star witness at Bankman-Fried’s trial, Caroline Ellison was sentenced to two years in September.
Kaplan cited her role in perpetuating the fraud and his view that cooperation should not be a “get out of jail free card.”
Singh was able to dodge his own sentence due to his relatively limited role in the fraud. Singh learned just two months before the collapse of FTX that Alameda has borrowed millions in customer funds to plug its own gaping hole, according to court papers.
“Your case is not the case that Ms. Ellison’s was,” US District Court Judge Lewis Kaplan told Singh in court last month. “She was involved from the beginning. She knew for years what was going on.”
Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Contact him at aleks@dlnews.com.
