FTX Co-Founder Gary Wang Walks Free After Testifying on SBF
A court sentenced FTX co-founder and long-time friend Sam Bankman-Fried to avoid jail time and sentenced him to three years of supervised release.
Authorities quickly extradited the former CEO from the Bahamas in December 2022, thanks to Wang’s help.
Cooperating with prosecutors saved Wang from jail
On November 20, Gary Wang was sentenced for his role in the 2022 collapse of cryptocurrency exchange FTX. Wang became the second witness to avoid jail time, joining former FTX engineering director Nishad Singh, who was sentenced in October.
“You did the right thing for yourself and you did the right thing for the country. If this is not the largest financial fraud in the history of the United States, it is certainly one of the two or three largest. The decision of this court Yes, you will be sentenced to three years of supervised release,” Judge Lewis A. Kaplan. explain During the trial.
Former CEO of FTX Sam Bankman-Freed Currently serving a 25-year prison sentence for embezzling more than $11 billion in client and investor funds. The court found him guilty of seven counts of fraud, money laundering and conspiracy. From then on he File an appeal.
authorities Accused Alameda’s former CEO, Caroline Ellison, September. They ordered her to forfeit the money and sentenced her to two years in prison. Last year, Wang testified in the case, detailing how FTX’s sister company Alameda Research used an unlimited credit line to illegally withdraw funds.
According to Wang’s testimony, Alameda had special access to the “allow negative balances” feature due to changes in the FTX codebase. This means their withdrawals may come from borrowed assets from the exchange.
The FTX co-founder created the software that runs the company’s widely used cryptocurrency trading platform. Code written by Wang created a backdoor on FTX that allowed Alameda unlimited access to its client funds. While recovering from the scandal, he later applied his technical skills to assist the authorities in the future.
“Gary worked with the government to design and build a new software tool to detect potential financial fraud in the open market,” Wang’s attorney wrote in a letter.
However, not everyone appreciated Wang’s efforts to rebuild his reputation after the incident. Some believe his cooperation should not be a “get out of jail free” card. Mr Wang’s help in uncovering the fraud was significant but still drew criticism.
Critics argued that his leniency set a troubling precedent for future cases. Better Markets CEO Dennis Kelleher issued a memo addressing Wang’s legal defense.
“While Wang appears to have cooperated extensively and continues to cooperate in meaningful and important ways, no criminal should be given a ‘get out of jail free’ card. This will create perverse incentives for future criminals to continue their criminal activity, hoping they won’t get caught, but if they do, they also plan to run to the prosecutor’s office and be the first one in so he or she can get the maximum sentence, if any. light.” debate.
as FTX crashes and disappears, The legal and ethical consequences of its players’ actions remain a subject of debate. it will be remembered as one of The largest financial fraud in U.S. history.
Meanwhile, the broader crypto industry is working to restore its reputation and implement stronger protections against similar abuses.
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