FTX Co-Founder Gary Wang Spared Prison

The final executive at the centre of the collapse of the FTX cryptocurrency exchange, learned his fate this week in a New York courtroom.

The Guardian reported that Gary Wang, the former chief technology officer at FTX, has been spared a prison sentence after the presiding judge, as well as US prosecutors, praised his efforts in the fraud trial of former FTX head Sam Bankman-Fried.

This was not the only development this month regarding FTX, after the bankrupt exchange filed a lawsuit against Binance and its former chief executive Zhao Changpeng seeking to recover $1.8 billion (£1.4bn) it alleges was fraudulently transferred by Sam Bankman-Fried.

No prison

Gary Wang will have headed into his sentencing appearance with a certain degree of trepidation, after Caroline Ellison (the star witness in the prosecution of Sam Bankman-Fried) had been sentenced to two years in prison, despite helping the prosecution.

Ellison began her sentence in early November, after she reported to a low-security federal prison in the suburbs of Connecticut.

But now the Guardian reported that the apologetic FTX co-founder Wang has on Wednesday received no time in prison.

Gary Wang had testified three partial days at Bankman-Fried’s trial last year, explaining his role as FTX’s chief technology officer in a fraud that the judge Lewis A Kaplan described as one of the two or three biggest in US history.

Deeply sorry

Judge Kaplan praised Wang for being the first person to cooperate after FTX collapsed in November 2022, sharing information that the assistant US attorney Nicolas Roos said enabled prosecutors to quickly extradite Bankman-Fried from the Bahamas in December 2022.

Given a chance to speak, Wang reportedly apologised to customers and investors.

“I’m deeply sorry to all the people hurt by my actions,” Wang was quoted as saying. “There were so many things I could have done differently.” Wang added that he “took the cowardly path instead of doing the right thing. Nothing I do will ever be able to make up for it.”

However assistant US attorney Roos described Wang’s work since the fraud in heroic terms, saying he was “the first FTX cooperator to come in the door” even though he played a minimal role in the fraud, and did not create the complicated computer code that enabled the fraud.

In his first day of meeting with prosecutors, Wang “deciphered basically half the case for us”, he said, adding that it might have taken the government months or years to figure out the code.

He said Wang has continued to cooperate with several agencies and those seeking to recover money for FTX investors. He said Wang had also created software that is enabling prosecutors to find unrelated financial frauds.

As he announced the sentence, judge Kaplan said Wang had “limited culpability” in the fraud.

FTX collapse

Wang and Caroline Ellison had pleaded guilty in December 2022 to multiple criminal charges, and agreed to co-operate with the US investigation.

FTX had collapsed into Chapter 11 bankruptcy protection back in November 2022, when a multi-billion dollar hole was found in its balance sheet.

After a notable trial in the United States, Sam Bankman-Fried was eventually sentenced to 25 years in prison.

Bankman-Fried is currently appealing the verdict and sentence.

Nishad Singh, the former engineering director at FTX, had pleaded guilty to six felony counts of fraud and conspiracy, but on 30 October 2024 was spared prison after judge Kaplan said his involvement “was much more limited than, certainly, Bankman-Fried and Ellison”.

Meanwhile Ryan Salame, a former FTX executive who did not co-operate with prosecutors, was sentenced to 7-1/2 years in prison in May after pleading guilty to making unlawful campaign donations to causes supported by Bankman-Fried.