Gary Wang, the co-founder of the now-defunct crypto exchange FTX, was sentenced on Wednesday to time served, along with three years of supervised release for his involvement in a sweeping $8 billion fraud scheme. This makes him the fifth and final ex-employee of FTX to face punishment in the fallout from the company’s collapse.
Sentenced After Cooperation With Authorities
Wang, who pleaded guilty to four criminal charges including conspiracy to commit wire fraud and conspiracy to commit securities fraud, faced a potential maximum sentence of 50 years.
However, according to CNBC, his cooperation with authorities played a significant role in the court’s decision. He was ordered to forfeit $11 billion, aligning with the penalties imposed on his co-defendants.
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In court, Wang expressed deep remorse for his actions, holding a single printed page that he did not refer to in his brief speech to customers and investors affected by FTX’s demise:
I took the easy path, the cowardly path, instead of doing the right thing. I will spend the rest of my life trying to make amends.
Wang’s defense team, however, contended that he lacked full visibility into the fraudulent activities of the exchange, claiming that he was unaware of the misuse of customer funds by FTX’s sister hedge fund, Alameda Research, until the scheme was already in motion.
A New Chapter After FTX Scandal
Assistant US Attorney Nicolas Roos praised Wang as an “exceptionally cooperative witness,” noting that he provided key insights into FTX’s operations, which facilitated the misappropriation of customer funds. This cooperation included assisting the government in understanding the coding that underpinned the exchange’s operations.
Since Wang’s cooperation, he has utilized his programming skills to help detect potential fraud in both stock and cryptocurrency markets. He is developing a tool aimed at identifying illegal activities in crypto transactions, a project that will continue alongside his ongoing cooperation with authorities.
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Wang was the first FTX employee to approach the government but was the last to be sentenced, marking the conclusion of criminal proceedings against former executives of the company.
This follows the sentencing of other key figures, including Sam Bankman-Fried, who received a 25-year prison sentence, and Caroline Ellison, the former CEO of Alameda Research, who was sentenced to two years for her role in the fraud.
Judge Lewis Kaplan, known for his firm stance in high-profile cases, commended Wang for taking responsibility for his actions, stating, “You’re entitled to a world of credit for facing up to your responsibility.” He acknowledged that Wang’s level of culpability was comparatively minor when evaluated against that of his co-defendants.
At the time of writing, FTX’s native token FTT is trading at $2.17, up a substantial 30% in the fourteen day time frame amid the broader market rally led by Bitcoin (BTC).
Featured image from DALL-E, chart from TradingView.com