Former FTX CTO Gary Wang Requests Leniency in Fraud Case

TLDR

• Gary Wang, FTX co-founder, requests no prison time ahead of November 20 sentencing
• Wang provided early cooperation with prosecutors and testified against Sam Bankman-Fried
• His lawyer argues his involvement was less than other executives like Caroline Ellison and Nishad Singh
• Wang is expecting his first child shortly after sentencing date
• U.S. government seeks to reclaim $13.25M in political donations from FTX executives

Former FTX co-founder and chief technology officer Gary Wang has asked a federal judge to spare him from prison time, following his guilty plea to fraud and conspiracy charges in the collapse of the cryptocurrency exchange.

Wang’s attorney, Ilan Graff, submitted a sentencing memo to Manhattan federal court, arguing that his client’s early cooperation with prosecutors and relatively minor role in the fraud scheme warrant a non-custodial sentence. The request comes as Wang awaits sentencing on November 20, 2024.

In the court filing, Graff emphasized that Wang was among the first FTX executives to meet with federal authorities and provide information about operations at both FTX and Alameda Research.

This cooperation proved vital in the prosecution of former CEO Sam Bankman-Fried, who received a 25-year prison sentence.

The defense team pointed to Wang’s specific role in the fraud, noting that he acted under direction rather than as an architect of the scheme.

During Bankman-Fried’s trial, Wang testified about being ordered to modify FTX’s code to allow Alameda Research access to customer funds, a key element of the fraud case.

“Gary was not involved in the scheme at its inception, was never provided with details of the scheme, and never engaged in any affirmative action of deception,” wrote Graff in the memo.

Unlike other executives, Wang’s role was primarily technical rather than strategic or public-facing.

The relationship between Wang and Bankman-Fried dates back to their teenage years, when they met at math camp.

They later became roommates at the Massachusetts Institute of Technology and maintained their connection through various professional ventures, including their work at Alameda Research before co-founding FTX in 2019.

In comparing Wang’s case to other FTX executives, his legal team highlighted the recent sentencing of Nishad Singh, FTX’s former head of engineering.

Singh received no prison time despite facing similar charges, instead getting three years of supervised release. Caroline Ellison, former CEO of Alameda Research, received a two-year prison sentence.

The defense argues that Wang’s level of involvement was less than both Singh and Ellison, making a non-prison sentence appropriate and consistent with the court’s previous decisions. This argument for sentencing parity forms a central part of Wang’s plea for leniency.

Personal circumstances also factor into Wang’s request. His attorney noted that Wang is expecting the birth of his first child shortly after his scheduled sentencing date.

Since February 2023, Wang has been employed at an imaging technology company, demonstrating his ability to continue contributing to society.

In the memo, Wang’s team emphasized his current focus on being “a good husband and father” while continuing to assist with efforts to help FTX victims recover their losses.

The defense portrayed Wang as someone who discovered the criminal activities “after it was well underway, having been lied to and deceived by Sam Bankman-Fried.”

The legal proceedings have revealed the extent of the fraud at FTX, with Bankman-Fried found guilty of defrauding customers and investors of approximately $10 billion.

Wang’s early cooperation with authorities helped establish these facts and supported the prosecution’s case.

In a parallel development, the U.S. government is working to recover about $13.25 million in political donations made by FTX executives, including contributions from Bankman-Fried and Singh. Judge Lewis Kaplan has extended the deadline for these recovery negotiations until January 15, 2025.

The outcome of Wang’s sentencing request will be determined at his November 20 hearing, where the judge will weigh his cooperation, role in the fraud, and personal circumstances against the severity of the crimes to which he pleaded guilty.