FORMER cryptocurrency executive Gary Wang, who unwittingly wrote the computer code that helped FTX founder Sam Bankman-Fried steal about US$8 billion from customers of the now-bankrupt exchange, was spared prison time by a judge on Wednesday (Nov 20).
US district judge Lewis Kaplan announced he would be imposing no prison time at a hearing in federal court in Manhattan. The judge praised Wang’s cooperation with prosecutors, and noted that he learned of Bankman-Fried’s fraud later than others in his former boss’s orbit.
“You are entitled to a world of credit for facing up to your responsibility,” Kaplan said. “The period of your culpability was in comparison to the periods of the culpability of the other defendants in this case extremely small.”
Wang, who is in his early 30s and had pleaded guilty to four felony counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges.
Wang and Bankman-Fried met at a summer math camp while they were both in high school. They reconnected while studying at the Massachusetts Institute of Technology, and eventually went into the cryptocurrency business together.
Wang was one of several FTX executives who lived with Bankman-Fried in a US$35 million penthouse in the Bahamas, where the exchange was based until its November 2022 bankruptcy.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Bankman-Fried, 32, is serving a 25-year prison sentence imposed by Kaplan after a jury last year found him guilty of stealing customer money to prop up his Alameda Research hedge fund, make speculative venture investments, and contribute to US political campaigns.
The fallen wunderkind is appealing his conviction and sentence.
Wang, FTX’s former chief technology officer, told the jury in October 2023 that his former boss instructed him to adjust FTX’s software code to give Alameda special privileges, enabling the fund to secretly withdraw billions of US dollars from the exchange.
His lawyers have acknowledged that he continued to work to maintain FTX’s platform after learning of Bankman-Fried’s fraud. Wang apologised on Wednesday.
“I took the easy path, the cowardly path, instead of doing the right thing,” Wang told the court. “I plan to spend the rest of my life doing everything I can to make amends.”
Prosecutors with the US Attorney’s Office in Manhattan had urged leniency, citing Wang’s cooperation. They also said Wang had built software to help the US government uncover fraud in the stock market, and is working on a similar tool for cryptocurrency markets.
“Mr Wang has this unique skill set where he can actually do something and deploy some of the skills he was using to perpetrate the fraud to productive ends,” prosecutor Nicolas Roos said on Wednesday.
Wang’s lawyer Ilan Graff said Wang did not know at first that Bankman-Fried had instructed him to grant Alameda special privilege in order to steal funds. He said Wang did not profit from the fraud.
“Gary did not knowingly create the so-called back doors that others exploited to steal customer money,” Graff told the court.
Wang is the last member of Bankman-Fried’s former inner circle to be sentenced by Kaplan.
Bankman-Fried’s former girlfriend and Alameda chief executive Caroline Ellison was sentenced to two years behind bars in September. Nishad Singh, another FTX computer programmer who pleaded guilty, was spared prison time last month. REUTERS
