Last FTX Co-Conspirator Standing Gary Wang Faces Sentencing

On 20 November, FTX co-founder Zixiao "Gary" Wang will face sentencing in a New York courtroom, where a judge will determine whether he spends years in prison or avoids incarceration after pleading guilty to fraud charges.

Wang is among five former FTX and Alameda Research executives indicted over the cryptocurrency exchange's collapse and misuse of user funds.

Having pleaded guilty to wire fraud, commodities fraud, and securities fraud, Wang also testified in the trial of Sam Bankman-Fried (SBF), whose conviction led to a 25-year prison sentence.

At 31, Wang could be the last defendant in the FTX case to receive sentencing, following prison terms handed to SBF, former Alameda CEO Caroline Ellison, and former FTX Digital Markets co-CEO Ryan Salame.

Nishad Singh, FTX’s former engineering director, was sentenced to time served in October.

Wang and Ellison were among the first to cooperate with authorities after FTX's November 2022 collapse, with Singh following suit in February 2023.

Wang's lawyers argue that he played "the most limited role" in defrauding FTX users, while prosecutors suggest his expertise could be used to develop tools for detecting illegal activity in crypto markets if he avoids prison.

However, the charges against Wang carry the potential for a lengthy sentence, as seen in the two years given to Ellison and Salame's seven-and-a-half-year term.

Judge Lewis Kaplan, who has overseen all FTX-related cases, will weigh Wang's fate.

Adam Jin, a former FTX employee, in a letter filed on 18 November:

“Gary has acknowledged his mistakes and deeply regrets his participation, and I have known him to be someone who takes full responsibility for his actions.”

Wang's Lawyers Argues Zero Punishment Despite His Willing Participation in the FTX Scandal

Wang pleaded guilty to multiple charges, including conspiracy to commit wire fraud, wire fraud on customers, and conspiracy to commit securities and commodities fraud.

He admitted to playing a central role in FTX's collapse by designing the platform's code to grant Alameda Research "special privileges," enabling it to withdraw or transfer funds beyond its account balance, even when it caused a negative balance.

This effectively facilitated the misappropriation of customer funds.

While Wang has cooperated extensively with authorities, both his legal team and prosecutors argue for a lenient sentence, potentially sparing him from prison.

However, granting such leniency risks setting a dangerous precedent.

Allowing criminals to escape significant consequences solely for cooperating could incentivise future wrongdoers to gamble on illegal activities, with the hope of negotiating reduced penalties if caught.

Justice requires accountability, and deterrence is essential to prevent similar misconduct.

Wang's actions were neither momentary lapses in judgment nor passive oversights.

By late 2021 or early 2022, he was an active participant in FTX's fraudulent activities and fully aware of their scale.

He could have stopped the theft of at least $7 billion in customer funds and prevented billions more in losses to investors.

Instead, he chose to remain silent, continuing his involvement as the crimes escalated.

Rather than stepping forward as a whistleblower months—or even days—before FTX's collapse, Wang waited until the implosion was unavoidable.

His decision to cooperate came only when it became clear that the scheme was unraveling, positioning himself to secure a more favourable deal.

Such tactical contrition does not absolve him of his earlier complicity or the catastrophic harm inflicted on FTX's customers and investors.

A measured sentence, including prison time, is necessary to reflect the gravity of his actions and uphold the principles of justice and deterrence.

Should Wang Be Given a Harsh or Lenient Sentence?

Wang played a pivotal role in the FTX fraud, serving as both a facilitator and enabler of one of the largest financial crimes in history.

At numerous critical junctures, Wang faced clear choices: to act lawfully or unlawfully, to halt the wrongdoing or allow it to continue.

Each time, he chose to further the scheme, despite his position to intervene and prevent the theft of billions of dollars.

His inaction resulted in the defrauding of thousands of lenders, investors, and customers, as the US Attorney aptly described, "one of the largest financial frauds ever," with devastating consequences.

Wang's eventual cooperation, while valuable, came only after the collapse of FTX was imminent, when the fraud was on the verge of public exposure.

By then, the damage was done—billions lost and trust shattered.

His late-stage cooperation highlights a challenging dilemma in white-collar crime sentencing: balancing the need to reward cooperation with the necessity of deterrence.

Given the difficulty in detecting corporate and financial crimes, a strong emphasis on deterrence is crucial.

Without significant penalties—both monetary and custodial—future wrongdoers may be emboldened, believing leniency is attainable through post-facto contrition.

While Wang's assistance helped prosecutors unravel the complex web of FTX's fraudulent activities, it does not absolve him of his extended participation in wire fraud, commodities fraud, and securities fraud, which caused monumental harm.

Meaningful consequences are necessary—not only to hold him accountable but also to deter others from engaging in similar crimes.

As FTX users prepare to receive reimbursement following an approved reorganisation plan, the broader implications of these cases continue to unfold.

SBF, now serving time in a New York prison, has appealed his conviction and sentence.

Whether Wang's cooperation will shield him from substantial punishment remains a critical test of the justice system's approach to balancing accountability and deterrence in white-collar crime.