Cash News
A South Jersey man has avoided a prison term for his role in a massive cryptocurrency fraud.
Zixiao “Gary” Wang used his talent as a computer programmer to enable a multibillion-dollar scam at FTX, a crypto trading platform that stole from its customers. But Wang also played a key role in the prosecution of higher-ups involved in the fraud, notably the company’s now-imprisoned leader, Samuel Bankman-Fried.
Wang helped to recover “hundreds of millions of dollars in assets for the benefit of victims,” federal prosecutors said in a Nov. 13 letter to Wang’s sentencing judge.
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A 2011 graduate of Cherry Hill High School East, Wang has lived in recent years at his parents’ home in Egg Harbor Township, court records said.
An attorney for Wang declined to comment Wednesday.
A U.S. Probation Office report said Wang would typically face a sentencing guideline of about 24 to 30 years for his crimes.
But U.S. District Judge Lewis Kaplan on Wednesday sentenced Wang, who’s been free on bail, to time served for his offenses.
Wang previously admitted guilt to wire fraud and conspiring to commit wire fraud, securities fraud and commodities fraud.
Wang was key witness
Wang was the first FTX executive to assist federal investigators, meeting with them within days of the Bahamas-based firm’s bankruptcy.
“Before Wang started cooperating, the government did not know the ways in which Bankman-Fried and his co-conspirators had misappropriated money from FTX customers,” the prosecution noted in a 16-page letter seeking leniency from Kaplan.
“Wang also provided the government with valuable documentary evidence that was not previously in its possession.”
It noted that Wang’s laptop contained computer code that was essential to the prosecution.
“In total,” the letter said, “Wang met with the government at least 20 times.”
Wang spent additional time reviewing “computer code, documents, emails, and spreadsheets in order to identify and decode relevant documents for the government,” according to the letter, which also noted his testimony over three days at Bankman-Fried’s trial.
The letter said Wang initially did not know his computer code allowed the theft of customers’ money. It also acknowledged that he stayed at FTX after learning of the fraud in late 2021 or early 2022.
But Wang, unlike his co-conspirators, didn’t take customers’ money and didn’t make false statements to customers, lenders or investors, the letter said.
“In fact, there were very few documents in the trial evidence, beyond the computer code, implicating Wang in the fraud,” it said.
Under those circumstances, the letter said, Wang’s decision to immediately help the prosecution “is in and of itself remarkable.”
Wang’s billions vanished
Bankman-Fried, who’s serving a 25-year term, and Wang were co-founders of FTX and Alameda Research, a crypto hedge fund. Wang’s software allowed FTX to divert funds to Alameda, where it was used by Bankman-Fried and others.
Wang, who made $200,000 a year at FTX, was a billionaire on paper before the companies collapsed and the scam was exposed in November 2022.
The letter also noted that Wang has continued to help prosecutors by creating software that helps detect fraud by publicly traded companies.
A similar tool is expected to be ready next year to better police cryptocurrency markets. That part of the letter’s blacked out over parts of three pages, with a footnote observing: “The public disclosure of those details could potentially undermine the effectiveness of the tool.”
Under his sentence, Wang is to serve three years of supervised release. Along with his co-conspirators, he’s liable for forfeiture of more than $11 billion.
Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal. Email: [email protected].