(Bloomberg) -- Much like his former FTX colleagues that became government witnesses, Gary Wang provided “outstanding” assistance to federal prosecutors building a case against the cryptocurrency exchange’s founder, Sam Bankman-Fried.
But the ex-coding chief at the platform, who is scheduled to be sentenced on Nov. 20 for his own role in the FTX collapse, appears to have an edge. He has created “tools” to help the US government detect other instances of fraud, prosecutors said as they pushed for a lenient sentence for Wang.
“Wang has also provided substantial assistance — and in the process taken steps to right past wrongs — by putting his extraordinary computer programing skills to use in detecting potential fraud in the stock and cryptocurrency markets,” federal prosecutors wrote in a sentencing submission filed on Wednesday. The details of Wang’s code were heavily redacted in the government filing.
Wang is the last of four former FTX executives to be sentenced following the exchange’s collapse in late 2022 that cost customers, lenders and investors about $10 billion at the time. Bankman-Fried is serving 25 years in prison after being convicted of orchestrating the yearslong fraud that allowed funds to be diverted into sister hedge fund Alameda Research. From there, funds were spent on luxury real estate, campaign donations and risky investments.
Unlike his co-conspirators, Wang did not lie to customers, lenders or investors and didn’t spend customer money, the government said. While prosecutors didn’t recommend a specific sentence, the submission asked the court to take Wang’s outstanding cooperation into account.
A former Google software engineer, Wang started FTX with Bankman-Fried after meeting the fellow Massachusetts Institute of Technology graduate at math camp as a teenager. He testified against Bankman-Fried, after pleading guilty to fraud and conspiracy in a cooperation agreement with the government.
His lawyers have asked Judge Lewis A. Kaplan to spare Wang from spending a day in prison, pointing to his extensive cooperation. Wang’s sentence will follow those given to former Alameda CEO Caroline Ellison and FTX engineering chief Nishad Singh. Ellison was sentenced to two years in prison while Singh received no jail time. The lawyers for each have sought to stand their clients apart from one another, highlighting the circumstances that make them worthy of leniency.
“Gary was unaware of the scheme when it started, never informed of its particulars, and unlike Bankman-Fried, Ellison, and Singh, never once took an affirmative step to deceive anyone,” Wang’s lawyer Ilan Graff wrote in a submission last week.
In the government’s sentencing submission, prosecutor Nicolas Roos said Wang was the first FTX insider to cooperate with prosecutors. This was despite little documentary evidence linking Wang to the fraud, he added.
In July 2019, Wang became involved in the fraud by changing code, at Bankman-Fried’s request, that gave Alameda special privileges at FTX. It wasn’t until late 2021 or 2022, that Wang learned Alameda had accessed approximately $3 billion in customer funds.
Wang has been working at an imaging technology company since early 2023, a sentencing memo previously filed by his lawyers stated, and his wife is expecting their first child.
--With assistance from Chris Dolmetsch and Bob Van Voris.
©2024 Bloomberg L.P.