Gary Wang, the former chief technology officer at FTX and a one-time member of former CEO and convicted fraudster Sam Bankman-Fried’s inner circle, has requested that he serve no prison time for his role in the crypto exchange’s 2022 implosion.
Wang will be the fourth FTX employee to be sentenced. He pleaded guilty to four criminal counts — wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud — in December 2022.
Though the charges carry a maximum combined sentence of 50 years in prison, the sentences meted out to Wang’s former colleagues are a likely better indicator for how Judge Lewis Kaplan of the Southern District of New York (SDNY) will sentence Wang on Nov. 20. Sam Bankman-Fried was sentenced to 25 years in prison in March, after pleading “not guilty” to seven fraud and conspiracy charges and being convicted. Ryan Salame, the former CEO of FTX Digital Markets, pled guilty to two charges but did not cooperate with prosecutors and received a 7.5 year sentence. Caroline Ellison, the former CEO of Alameda Research, was sentenced to 2 years in prison after pleading guilty to the same charges as Bankman-Fried. And last month, Nishad Singh, the former director of engineering, was spared jail time entirely after pleading guilty to six charges and cooperating with prosecutors.
In their sentencing memo submitted to the court on Wednesday, Wang’s lawyers said that the factors cited in Judge Kaplan’s decision to sentence Singh to time served are “similarly applicable” to Wang.
“Like Singh, [Wang’s] involvement in the offense was ‘much more limited than’ Bankman-Fried and Ellison,” Wang’s lawyers wrote. “Like Singh, [Wang] learned of the scale and scope of Alameda’s theft ‘relatively late in the day’ and was subject to Bankman-Freid’s ‘charismatic, demanding’ and ‘deceitful’ influence….and like Singh, [Wang’s] cooperation was ‘remarkable.’
But Wang’s lawyers went a step further in their comparison – Wang, they argued, was even less involved in Bankman-Fried’s schemes – and reaped fewer financial rewards – than Singh, who went through with the purchase of a $3.7 million ten-acre estate after learning of FTX’s financial problems in October 2022.
“Unlike Singh, [Wang] did not engage in money laundering or participate in the straw donor scheme. Unlike Singh, [Wang] did not generate false revenue, code a fake insurance fund, try to persuade Bankman-Fried to fraudulently conceal his loans, or otherwise participate in affirmatively deceptive conduct. And, unlike Singh, [Wang] did not receive cash bonuses or spend FTX proceeds on real estate or other extravagant goods,” Wang’s lawyers wrote. “All of these factors combine to make him meaningfully less culpable than Singh.”
Wang’s role at FTX, they said, was to write code – including the now-infamous “backdoor” that allowed Alameda to withdraw customer funds from FTX.
“At Bankman-Fried’s direction, Gary wrote code that gave Alameda Research special privileges on the FTX platform, including the ability to have a negative balance, a $65 billion line of credit, and an exemption from the platform’s auto-liquidation feature,” they wrote. “Crucially, as the Government has acknowledged and the evidence at trial showed, when Gary wrote that code, he had no idea Bankman-Fried would exploit the features to steal customer funds.”
In their memo, Wang’s lawyers told the court that their client never sought compensation beyond his $200,000 annual salary. When he was given an unsolicited $1 million loan from Sam Bankman-Fried, he loaned $200,000 to his then-fiancee Cheryl Chen to buy a house in St. Kitts. The remaining $800,000, they said, was still in his FTX account at the time of its collapse.
Wang, his lawyers said, was uninterested in the “fame or the trappings of wealth” that his colleagues and former friends enjoyed during FTX’s run. The suit he wore to testify at Bankman-Fried’s trial, they said, was the same one he wore in high school orchestra.
Following the collapse of FTX, his lawyers said, Wang has lived with his mother and gotten a full-time job at a 3D imaging company as a software engineer. In January 2023, he and Chen married, and are expecting their first child later this month.
Wang is set to be sentenced on Nov. 20.
