FTX co-founder Gary Wang avoids prison time for role in crypto fraud

Gary Wang, co-founder and ex-technology chief of FTX, was sentenced Wednesday to time served and three years of supervised release on each of the four counts he pled guilty to, becoming the fifth and final ex-employee of the collapsed crypto exchange to be punished. Wang was also ordered to forfeit $11 billion, the same as the other co-defendants.

Wang, who took the stand in the trial against his former boss Sam Bankman-Fried, faced a maximum sentence of 50 years for the four criminal counts he pleaded guilty to, including conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud and conspiracy to commit securities fraud. 

After FTX’s former engineering chief Nishad Singh successfully avoided prison time when he was sentenced by Judge Lewis Kaplan last month, Wang was seeking the same sentence citing his nearly immediate cooperation with the government.

When given the opportunity to address the court, Wang said he was deeply sorry to all the customers and investors in FTX.

“I took the easy path, the cowardly path, instead of doing the right thing,” Wang said in a short address to the court, as he clutched a single printed piece of paper that he never referenced from the podium.

“I will spend the rest of my life trying to make amends,” he added.

Wang’s parents, as well as his wife, who is expecting their first child, were in court to support him.

Attorneys for Wang say he didn’t have full visibility on the crimes, unlike the other cooperating witnesses, and didn’t know that FTX’s sister hedge fund Alameda Research was taking customer money until after the scheme was underway.

The government was also seeking leniency for Wang.

Assistant U.S. Attorney Nicolas Roos described Wang as the easiest cooperating witness he had ever worked with, and he credited Wang for essentially deciphering half of the case for the Government by meticulously unpacking the complicated code used by FTX that allowed for the customer money to be taken off the exchange.

In the sentencing submission, prosecutors added that since testifying against the former FTX CEO, Wang has “put his extraordinary computer programing skills to use in detecting potential fraud in the stock and cryptocurrency markets,” and has built an interface that the government has started using for detecting potential fraud by publicly traded companies.

In addition, “Wang has also been working on a tool for detection of potential illegal activity in cryptocurrency markets, which in the event Wang is sentenced to a period of time served, the Government understands he will complete as part of his ongoing cooperation.”

Roos also noted that Wang was the first FTX employee to walk through the government’s door but the last to be sentenced, as the FTX criminal proceedings come to a close.

In March, Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion — the harshest punishment from Judge Kaplan.

Alameda’s ex-CEO Caroline Ellison, who was the star witness in Bankman-Fried’s prosecution and his ex-girlfriend, was sentenced to two years in prison for her role in the crime. And Ryan Salame, another former top lieutenant of Bankman-Fried, was sentenced to seven and a half years in prison in May — beyond the upper limit recommended by prosecutors.

All FTX former executives have faced sentencing before Judge Kaplan. The no-nonsense 78-year-old judge is a veteran of the Southern District of New York and has presided over some of the biggest cases to roll through the courthouse at 500 Pearl Street in downtown Manhattan.

“I’ve never seen anything quite like what happened here,” Kaplan said of Wang’s cooperation. “You’re entitled to a lot of credit.”