FTX co-founder Gary Wang sentenced to ‘time served’ as FTX criminal cases end FTX co-founder Gary Wang sentenced to ‘time served’ as FTX criminal cases end
Judge grants leniency to Gary Wang after his key role in exposing FTX's misuse of funds.
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Updated: Nov. 20, 2024 at 4:03 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Gary Wang, co-founder and former chief technology officer of crypto exchange FTX, was sentenced to time served with no additional jail time after providing extensive cooperation to U.S. prosecutors in one of the largest financial fraud cases in history, as reported by Inner City Press.
Inner City Press shared live updates from the court via its X account detailing that Judge Lewis A. Kaplan acknowledged Wang’s significant assistance during the sentencing hearing, stating,
“If this wasn’t the biggest financial fraud in U.S. history, it was certainly among the biggest two or three.”
Wang faced up to 50 years in prison but began cooperating with authorities shortly after FTX’s collapse in November 2022.
Prosecutor Andrew Roos emphasized the uniqueness of Wang’s cooperation, highlighting his technical expertise and willingness to assist from the outset. “He deciphered half the case for us on the first day of his cooperation,” Roos said. Wang’s insights were crucial in understanding how FTX’s code allowed for the misappropriation of customer funds, which played a central role in the fraudulent activities tied to the exchange.
Wang admitted that FTX had sent billions of dollars in customer funds to its sister trading firm, Alameda Research, without user consent. He revealed that Alameda was permitted to borrow unlimited amounts and maintain a negative balance on FTX, effectively using customer assets to cover losses and fund operations. These disclosures were instrumental in building the case against former FTX CEO Sam Bankman-Fried and other executives.
Beyond his testimony, Wang took proactive steps to aid the investigation. He developed software tools to help prosecutors detect securities fraud, dedicating personal time to these efforts. “He was the easiest cooperator I’ve ever worked with,” Roos noted, adding that Wang’s contributions could assist in uncovering future fraud cases before they escalate.
During the hearing, Wang expressed deep remorse for his actions. “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.” He pledged to continue assisting efforts to make customers whole and to support government investigations.
Wang’s attorney, Ilan Graff, highlighted his client’s commitment to rectifying the situation. He mentioned that Wang has since found employment outside the crypto industry, is expecting his first child, and seeks to move forward responsibly. Graff argued that a sentence of time served would allow Wang to “continue his cooperation with the government and the bankruptcy estate” and to “be the devoted husband and father he so desperately seeks to be.”
Judge Kaplan granted the prosecution’s motion recognizing the substantial assistance provided by Wang. In delivering the sentence, the judge stated, “You did the right thing for yourself and the right thing for the country.” Wang received time served and three years of supervised release.
Wang’s sentencing follows that of former Alameda Research CEO Caroline Ellison, who was sentenced to two years in prison after her own cooperation with authorities. Both individuals played key roles in exposing the inner workings of FTX and Alameda Research, shedding light on practices that led to significant financial losses for customers and investors.
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Liam 'Akiba' Wright
Also known as "Akiba," Liam Wright is a reporter, podcast producer, and Editor-in-Chief at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.