Former FTX CTO Gary Wang Seeks Leniency in Sentencing

Gary Wang, the former chief technology officer of FTX and a close associate of the convicted fraudster Sam Bankman-Fried, has filed a request to avoid prison time for his involvement in the collapse of the crypto exchange in 2022.

Wang is set to be the fourth employee of FTX to receive sentencing. He pleaded guilty in December 2022 to four criminal charges: wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit commodities fraud.

Context of Sentencing

The maximum combined sentence for Wang’s charges could reach 50 years. However, the sentences given to his former colleagues may provide insight into how Judge Lewis Kaplan of the Southern District of New York will rule on Wang’s case on November 20. Notably, Sam Bankman-Fried received a 25-year sentence after being convicted of seven fraud and conspiracy charges. Other former colleagues, such as Ryan Salame and Caroline Ellison, received sentences of 7.5 years and 2 years, respectively. In contrast, Nishad Singh, the former director of engineering, was granted no prison time after cooperating with prosecutors.

Legal Arguments for Leniency

In the sentencing memorandum submitted to the court, Wang’s attorneys argued that the circumstances surrounding Wang’s case are similar to those that led to Singh receiving time served. They emphasized that Wang's involvement in the wrongdoing was significantly less than that of Bankman-Fried and Ellison.

Wang’s lawyers highlighted that he became aware of the extent of Alameda’s theft only later in the process and was heavily influenced by Bankman-Fried’s charismatic and deceptive leadership. They also pointed out that Wang’s cooperation with authorities was commendable.

Comparison with Other Defendants

Wang’s legal team further asserted that he was even less involved than Singh, who had engaged in questionable financial activities after learning about FTX’s problems. They noted the following distinctions:

• Wang did not participate in money laundering or the straw donor scheme.
• He did not create false revenue or attempt to conceal loans.
• Wang did not receive bonuses or spend FTX funds on luxury items.

These factors, they argue, position Wang as significantly less culpable than his peers.

Wang's Role and Financial Situation

Wang’s primary responsibility at FTX was to write code, including a controversial "backdoor" that allowed Alameda to withdraw customer funds. His lawyers stated that when he developed this code, he was unaware of Bankman-Fried’s intentions to exploit it for theft.

Wang’s financial situation was modest; he never sought compensation beyond his $200,000 salary. When offered a $1 million loan from Bankman-Fried, he only used $200,000 to help his fiancée buy a house, leaving the rest in his FTX account at the time of its downfall.

Personal Life After FTX

Since the collapse of FTX, Wang has been living with his mother and has secured a job as a software engineer at a 3D imaging company. He married his fiancée, Cheryl Chen, in January 2023, and they are expecting their first child later this month.