FTX Co-Founder Gary Wang Exempted from Prison After Testifying Against SBF

The court did not sentence the FTX co-founder and long-time friend of Sam Bankman-Fried to prison, but ordered his release under 3 years of supervision. The authorities acknowledged the king's help in the swift extradition of the former CEO from the Bahamas in December 2022. The king, who cooperated actively with the prosecution, avoids imprisonment On November 20, Gary Wang was sentenced for his involvement in the 2022 collapse of the cryptocurrency exchange FTX. Wang became the second witness to avoid a prison sentence, along with Nishad Singh, the former FTX engineering chief who was sentenced in October. "You did the right thing for yourself, and the right thing for the country. If this wasn't the largest financial fraud in American history, it was certainly one of the top 2 or 3. The judgment of this court is that you are released on 3 years of supervision for the time you have served." - Judge Lewis A. Kaplan said during the trial. Former FTX CEO Sam Bankman-Fried is serving a 25-year sentence for embezzling over $1.1 billion of customer and investor funds. The court found him guilty on 7 charges including fraud, money laundering, and conspiracy. He has since filed an appeal. The authorities charged Alameda's former CEO Caroline Ellison in September. She was ordered to forfeit money and sentenced to 2 years in prison. Last year, Wang testified in detail how Alameda Research, an FTX sister company, illegally withdrew funds using unlimited credit limits. According to Wang's testimony, Alameda had special access privileges to the "negative balance allowance" feature in the FTX codebase, meaning their withdrawals could come from assets borrowed from the exchange. The FTX co-founder created the software that powered the widely used cryptocurrency trading platform. Wang wrote the code that enabled Bankman-Fried's fraudulent activities, allowing Alameda to borrow customer funds without limit. He later helped authorities by using his technical abilities to [REDACTED]. "Gary has designed and built new software tools to help the government detect potential financial fraud in public markets by cooperating with them." - Wang's lawyers wrote in a letter. Not everyone welcomed Wang's attempts to rehabilitate his reputation after the incident. Some argued his cooperation should not be a "get out of jail free card". While his help in exposing the fraud was important, he still faced criticism. Critics believe his leniency sets a concerning precedent for future cases. Better Markets CEO Dennis Kelleher released a memo on Wang's legal defense. "While Wang appears to have cooperated extensively and in meaningful and important ways, no criminal should get a 'get out of jail free card'. That would create a perverse incentive for future criminals to hope they won't get caught and, if they do, to rush to the prosecutor's office to try to get the lightest sentence possible." - the management argued. FTX has emerged as one of the largest financial frauds in American history, and the legal and ethical consequences for those involved are still debated as the fallout from the FTX collapse fades. At the same time, the broader cryptocurrency industry is struggling to implement robust safeguards against similar abuses and restore its reputation.