Bankman-Fried’s ex-deputy Wang avoids prison time over crypto fraud

By Luc Cohen

NEW YORK (Reuters) – Former cryptocurrency executive Gary Wang, who wrote the computer code that helped FTX founder Sam Bankman-Fried steal about $8 billion from customers of the now-bankrupt exchange, was spared prison time by a judge on Wednesday.

U.S. District Judge Lewis Kaplan announced he would be imposing no prison time at a hearing in federal court in Manhattan.    

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 $35 million penthouse in the Bahamas, where the exchange was based until its November 2022 bankruptcy.

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 U.S. 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 dollars from the exchange. 

Prosecutors with the U.S. Attorney’s Office in Manhattan had urged leniency, citing Wang’s cooperation in the case against Bankman-Fried. They said he was also less involved than other co-conspirators in the fraud. 

“He did not spend a dime of customer money,” the prosecutors wrote.

They also said Wang had built software to help the U.S. government uncover fraud in the stock market. He is also working on a similar tool for cryptocurrency markets, which prosecutors said he could complete if spared jail time. 

Wang’s lawyer Ilan Graff implored Kaplan to spare his client prison time because of his assistance to prosecutors. 

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.

(Reporting by Luc Cohen in New York; editing by Jonathan Oatis)