Former FTX insider Gary Wang works on crypto fraud detector after testifying about crypto fraud – DL News

Gary Wang, co-founder and former CTO of failed crypto exchange FTX, not only helped the federal government prosecute his former boss for fraud.

Wang is also helping potentially identify illicit activities on other crypto exchanges, according to a court document filed ahead of his November 20 sentencing for his role in the FTX debacle.

In December 2022, Wang struck a plea deal with the Department of Justice. He was a key witness in the trial of former FTX CEO Sam Bankman-Fried, who was eventually sentenced in March to 25 years in prison. Bankman-Fried has appealed his conviction.

Wang’s testimony was especially important in proving that Bankman-Fried knew about a back door through which Alameda Research, a crypto hedge fund Bankman-Fried also owned, illegally withdrew FTX customer assets.

In less than two weeks, Wang is set to appear before US District Court Judge Lewis Kaplan to receive his own sentence. In a submission filed on Wednesday, he asked for no prison time.

His lawyers cited, among other reasons, his cooperation with law enforcement. His willingness to work with prosecutors not only extended to Bankman-Fried’s case.

“Gary has worked with the government to design and build a new software tool to detect potential financial fraud in public markets,” wrote Wang’s lawyers.

The FTX co-founder is also “developing a separate tool focused on identifying illicit activity on crypto exchanges,” they added.

Wang isn’t the only FTX lieutenant to ask for no prison time because of his cooperation with the Justice Department.

Former FTX executives Caroline Ellison, and Nishad Singh, who both struck plea deals, also pointed to their work with the government.

Ellison received a two-year prison sentence in September. Singh was sentenced to time served in October.

Ryan Salame, an FTX executive who didn’t testify against Bankman-Fried, was sentenced to seven-and-a-half years in prison in May. He reported to prison in October.

Wang hopes to get the same lenience as Singh, whom colleagues called the “king of kindness.”

“Your case is not the case that Ms. Ellison’s was,” Kaplan told Singh in court. “She was involved from the beginning.”

In addition to Wang’s work with prosecutors, his lawyers also cited his cooperation with FTX’s bankrupt estate, his help with an ongoing putative class action against FTX, and his attempts to rebuild a “productive life.”

Wang is married and awaiting the birth of his first child.

Ben Weiss is DL News’ Dubai Correspondent. Got a tip? Email him at [email protected].