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FTX co-founder Gary Wang has avoided jail time after his quick cooperation with prosecutors helped seal the criminal conviction of the crypto exchange’s other founder, Sam Bankman-Fried.
At a hearing on Wednesday, Judge Lewis Kaplan said Wang “immediately did the right thing” by traveling to the US from the Bahamas shortly after FTX’s collapse in 2022 and offering his full assistance to law enforcement and the team conducting surveillance ends on the bankruptcy of the stock exchange.
He was sentenced to prison and ordered to forfeit his share of $11 billion in illegal profits.
Wang, who was born in China and studied at the Massachusetts Institute of Technology, pleaded guilty to fraud in 2022.
He was one of the key witnesses during the Bankman-Fried trial, in which he told the jury that FTX secretly dipped into customer funds just months after the crypto exchange was founded in 2019.
Bankman-Fried was found guilty of fraud and money laundering and sentenced to 25 years in prison.
In brief remarks to the court before his sentence was handed down, Wang said: “I am deeply sorry to all the people hurt by my actions.” Choking on his words, he added, “I took the easy way, the cowardly way, instead of doing what was right.”
With the imposition of his sentence on Wednesday, Wang became the second FTX insider to become a cooperating witness to avoid incarceration, after coder Nishad Singh was sentenced to prison last month for his assistance in the case against Bankman-Fried.
Caroline Ellison, the former head of FTX-affiliated trading firm Alameda, who also testified at the Bankman-Fried trial, was sentenced to two years in prison in September.
Ahead of Wang’s sentencing, US prosecutors wrote to Kaplan praising the FTX coder and former chief technology officer for his “substantial assistance” in the case against Bankman-Fried, and subsequent assistance in other criminal investigations by the US attorney’s office in Manhattan .
They said Wang had “used his extraordinary computer programming skills to detect potential fraud in the stock and cryptocurrency markets” and “built an interface that the government has begun using to detect potential fraud by publicly traded companies”.
Prosecutor Nick Roos said in court on Wednesday that there are threatened charges by the US Attorney’s Office that were investigated using Wang’s tool.
Wang, who became the first FTX defendant to cooperate with the government in November 2022, also helped prosecutors untangle the exchange’s complex code and identify the method by which Bankman-Fried siphoned off customer funds.
Without Wang’s help, “it would have taken a software expert weeks or even months” to find that backdoor, prosecutor Thane Rehn said earlier this year.