FTX Co-Founder Appeals to Escape Prison Time, What’s Next?

FTX co-founder Gary Wang has asked a federal judge to avoid imposing a prison sentence on him ahead of his sentencing scheduled for November 20. His legal defense cited his role as a cooperating witness in the prosecution of former business associate Sam Bankman-Fried. Also, the defense attorneys emphasized that he should be spared incarceration due to his assistance in the investigation and relatively minor involvement in the FTX crypto fraud scheme.

A Look At FTX Founder Gary Wang’s Appeal

In a recent sentencing memo filed in Manhattan’s federal court, Wang’s lawyer, Ilan Graff, argued that Wang’s cooperation was critical to prosecutors. He noted Wang “was one of the first FTX executives” to voluntarily approach authorities and provide insights into the workings of FTX and its sister company, Alameda Research.

Moreover, Wang’s testimony contributed to the conviction of Bankman-Fried, who recently received a 25-year prison term for his part in the FTX fraud. During Bankman-Fried’s trial, Wang recounted how he had been directed to modify FTX’s code to grant Alameda Research unauthorized access to client funds, a central point in Bankman-Fried’s fraud case.

Furthermore, Graff contended that Wang’s role in the scheme was limited, as he had not initiated or orchestrated the fraudulent activities, nor had he provided misleading information to investors. “Gary was not involved in the scheme at its inception, was never provided with details of the scheme, and, in contrast to Bankman-Fried, Ellison, and Singh, never engaged in any affirmative action of deception,” Graff wrote in his memo.

Crypto Criminals: FTX’s Gary Wang this afternoon asked for “non custodial” sentence (no jail time) when he is sentenced on Nov 20. SBF got 25 years, Caroline Ellison got 2 years, and Nishad Singh got no jail. And Wang? Inner City Press will live tweet it https://t.co/txhEhR3lhw pic.twitter.com/9ttJxPuwAS

— Inner City Press (@innercitypress) November 6, 2024

The defense also pointed to the sentencing outcomes for other former FTX and Alameda executives, including Nishad Singh, former head of engineering, and Caroline Ellison, Alameda’s ex-CEO. Singh, who had also cooperated with the government, avoided prison and was given time served along with three years of supervised release.

In addition, Graff argued that imposing prison time on Wang would create an “unwarranted sentencing disparity” compared to Singh, who held a more substantial role. Ellison, a major cooperator in the case, was given a two-year prison sentence; however, Graff contended that Wang’s involvement was less direct, reinforcing a case for no jail time.

Other Reasons

Wang’s attorney also raised personal considerations, revealing that Wang is expecting his first child soon after his sentencing date. Graff suggested that a non-custodial sentence allowing Wang to stay with his family would align with the court’s treatment of other cooperators. “Gary wants nothing more than to be a good husband and father and to continue his work to facilitate FTX victims’ recovery,” Graff emphasized in the memo.

In a related matter, the U.S. government is actively pursuing the recovery of roughly $13.25 million in political donations made by FTX executives, including contributions from Bankman-Fried and Singh. Judge Lewis Kaplan recently granted the government an extension to negotiate the return of these funds with political action committees, pushing the deadline for discussions to January 15, 2025.

Also Read: WazirX Unveils Major Airdrop, 4 Key Initiatives to Maximize Fund Recovery