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A promising graduate of Cherry Hill High School East is hoping to avoid prison for his role in a massive cryptocurrency fraud.
A defense filing for Zixiao “Gary” Wang cites his accomplishments while at East as part of a request for leniency at a Nov. 20 sentencing.
Wang was the coding expert behind a multi-billion-dollar fraud led by Samuel Bankman-Fried, who’s serving a 25-year term. Software developed by Wang allowed funds to be diverted from unwitting depositors at FTX, a crypto trading platform, to Alameda Research, a crypto hedge fund.
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Wang helped Bankman-Fried establish both companies and was a billionaire on paper for his holdings in them before their collapse in November 2022.
He pleaded guilty in December 2022 to wire fraud and conspiracies to commit wire fraud, securities fraud and commodities fraud.
A defense sentencing memorandum asserted that Wang learned of the fraud after it was “well underway, having been lied to and deceived by Sam Bankman-Fried.”
But it added: “To Gary’s lasting shame, when he finally realized the extent of Alameda’s theft less than a year before FTX’s collapse, he failed to stop the scheme and instead quietly continued his round-the-clock work to keep the FTX platform’s day-to-day operations running.”
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Cherry Hill East grad helped investigators
The memorandum noted that Wang was the first participant in the scheme to help government investigators, including testifying for three days at Bankman-Fried’s criminal trial last year.
It also asserted that Wang, who earned $200,000 a year as chief technology officer at FTX, did not take stolen funds or pursue the lavish lifestyle of others in the fraud.
Instead, the 2011 East graduate, described as quiet and publicity shy, showed a “lifelong indifference to material wealth” and typically wore “free promotional T-shirts on top and a pair of cheap jeans on the bottom.”
Quoting Wang’s mother, it said Wang testified at Bankman-Fried’s trial while wearing the suit “he bought when he was in his high school symphony orchestra.”
Wang, born in Beijing, came to Cherry Hill as a high school sophomore. He had lived previously in Fargo, North Dakota, and St. Paul, Minnesota, where his parents were pursuing engineering studies.
While at East, Wang captained the math team and was a finalist in two prestigious competitions: the USA Computing Olympiad from 2009 through 2011, and the North American Computational Linguistics Olympiad in 2011.
Wang, a volunteer at the local library, also was a semifinalist in the USA Biology Olympiad in 2010, the 51-page memorandum said. He also was a member of the school’s chess team, chem club and science Olympiad, according to East’s 2021 yearbook.
A quote beneath Wang’s photo in the yearbook, attributed to British author Douglas Adams, reads: “A learning experience is one of those things that say, ‘You know that thing you just did? Don’t do that.’”
Property records show Wang’s parents sold their Cherry Hill home in 2017 and now own a home in Egg Harbor Township.
Wang, who had “virtually no financial resources” after the collapse of FTX, has lived with his mother for the past two years, the filing says.
FTX bankruptcy filings give an Egg Harbor Township address for Wang.
How Wang met Bankman-Fried
The filing noted another impactful event from Wang’s teen years: “It was during high school that Gary first met Bankman-Fried in a summer math camp.”
Both attended the Massachusetts Institute of Technology, becoming friends and roommates.
But the memo asserts Bankman-Fried would later “prey on Gary’s trusting nature to involve him in the FTX fraud.”
It said Bankman-Fried recruited Wang, then a software engineer at Google, to help launch Alameda in 2014. Wang wrote Alameda’s computer code in exchange for a 10% ownership share.
About two years later, Wang similarly helped create FTX and stayed with Bankman-Fried as the operation moved from California to Hong Kong to the Bahamas.
The filing contends Wang initially did not know his code could be used to siphon deposits from FTX to Alameda.
It said he first learned “by happenstance” that FTX depositors’ funds were going to Alameda — the essence of the fraud – in late 2019 or early 2020. The memo alleged he initially accepted a false explanation from Bankman-Fried.
“Gary will regret the devastating impact of his misplaced reliance on Bankman-Fried for the rest of his life,” the memorandum said.
Among other points, the memorandum said Wang helped authorities preserve $800 million in FTX funds jeopardized by a hack during the firm’s bankruptcy in November 2022.
At the direction of prosecutors, it added, Wang is developing a tool “focused on identifying illicit activity on crypto exchanges.”
Wang is also expected to turn over to FTX debtors “substantially all of his remaining assets after satisfying his forfeiture obligations, and will provide ongoing cooperation,” the memorandum continued.
It noted that another software engineer at FTX, Nishad Singh, also avoided prison time when he was sentenced Oct. 30 to time served, along with three years of supervised release.
Like Bankman-Fried, Singh also faces a forfeiture order of more than $11 billion.
The memo, filed Wednesday in Manhattan federal court, contended that prison time “would disrupt (Wang’s) ongoing cooperation” and “risk deterring future cooperation.”
It pointed out that Wang, who has lived at his parents’ home in Egg Harbor Township for the past two years, is to be sentenced one week before his wife’s due date for their first child.
“A custodial sentence would leave both (Wang’s wife) and Gary’s soon-to-be-born son without their primary source of financial support,” the memorandum said.
(This story has been updated to add information and a photograph.)
Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal. Email: [email protected].