Gary Wang, the co-founder of FTX, avoided prison time on Wednesday after being sentenced to time served and three years of supervised release for his role in the cryptocurrency exchange’s collapse.
U.S. District Judge Lewis Kaplan praised Wang’s cooperation with authorities, stating, “You did the right thing for yourself, and the right thing for the country.”
Judge Kaplan acknowledged the magnitude of the case, describing it as one of the largest financial frauds in U.S. history. “If this wasn’t the biggest financial fraud in U.S. history, it was certainly among the biggest two or three,” the judge said during sentencing.
Wang, a high school classmate of former FTX CEO Sam Bankman-Fried, was a key witness in the criminal case against him. Wang spoke extensively about how billions of dollars in customer monies were transferred to FTX’s sister organization, Alameda Research.
He disclosed technological changes made to FTX’s codebase, like the “allow_negative” balance feature that gave Alameda the ability to borrow from user accounts and make an infinite number of withdrawals.
Wang, along with Alameda’s ex-CEO Caroline Ellison, cooperated with prosecutors early on, hoping for leniency. Assistant U.S. Attorney Nicolas Roos described Wang as one of the easiest cooperators he has worked with and praised his contribution, stating Wang had developed an “impressive tool for detecting fraud at FTX.”
During Wednesday’s hearing, Wang expressed remorse, saying, “I am deeply sorry to all the customers and investors in FTX who trusted us. There are so many things I could have done.”
Judge Kaplan credited Wang’s cooperation in helping bring justice in the case: “I don’t think I need to say much about the extent of your cooperation. You are entitled to a world of credit.”
While Bankman-Fried was sentenced to 25 years in prison earlier this year and is currently appealing his conviction, other members of FTX’s leadership team have faced varying outcomes.
Caroline Ellison received a two-year sentence in September, forfeiting $11 billion, while engineering chief Nishad Singh also avoided prison time. Co-CEO Ryan Salame, who did not cooperate with prosecutors, received a seven-and-a-half-year sentence.
Wang has since left the cryptocurrency industry and is expecting his first child.
