Two former senior executives of the collapsed cryptocurrency exchange FTX are set to face sentencing later this year for their roles in one of the biggest financial scandals in recent history. This was revealed in a July 9 court docket entry in the U.S. District Court for the Southern District of New York.
Upcoming Sentencing of Former FTX Executives
According to the court docket, Nishad Singh, former Director of Engineering, and Gary Wang, former Chief Technology Officer, will learn their fates on October 30 and November 20, respectively.
Singh and Wang were believed to have played crucial roles in the conviction of FTX’s founder and former CEO, Sam Bankman-Fried, as their testimonies provided insider information on the fraudulent practices that led to the exchange’s downfall in late 2022.
Singh, who joined FTX in 2019, pleaded guilty in February 2023 to six criminal charges, including fraud and conspiracy.
During Bankman-Fried’s trial in October 2023, Singh revealed that he had discovered an $8 billion hole in FTX’s finances around September 2022. Despite this knowledge, he admitted to signing off on customer funds transactions.
Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
— US Attorney SDNY (@SDNYnews) December 22, 2022
Singh also testified to programming systems that routed FTX customer deposits to Alameda Research, a crypto trading firm founded by Bankman-Fried. These systems created “special privileges” for Alameda on the FTX platform.
On the other hand, Wang pleaded guilty to four criminal charges, including wire fraud and multiple conspiracy counts, providing equally incriminating testimony.
He admitted to helping develop parts of FTX’s website, including a piece of code designed to misrepresent the exchange’s “public insurance fund.” This fund, meant to reassure investors of FTX’s financial stability, was essentially dubious, according to Wang’s testimony.
SBF Trial Day 4 – Gary Wang testimony
FTX’s published insurance fund number was fake and FTX’s published insurance fund balance was produced by a random number generator!
Transcript extracts below
Q. And the number here, what is the size of the backstop fund listed?
A. Five…
— BitMEX Research (@BitMEXResearch) October 6, 2023
Both executives expressed hope for leniency in their sentencing. Wang stated that he cooperated with the FBI “because it seemed like the right thing to do” and to potentially avoid prison time. Similarly, Singh expressed his hope for “no jail time” during his testimony.
The Backstory of Nishad Singh, Gary Wang, and the Implications of Salame’s FTX Case
The sentencing of Nishad Singh and Gary Wang is set against the backdrop of a wider legal saga involving key FTX figures, most notably founder Sam Bankman-Fried (SBF) and former FTX Digital Markets co-CEO Ryan Salame.
On May 28, U.S. District Court Judge Lewis Kaplan sentenced Salame to 7.5 years in prison.
The sentence followed Salame’s guilty plea in September 2023 to two felony charges – conspiracy to operate an unlicensed money-transmitting business and engaging in campaign finance fraud.
U.S. Attorney Damian Williams highlighted how Salame’s actions contributed to an “unlawful political influence campaign” and helped FTX grow “by operating outside the law.”
While Salame received a 7.5-year sentence, Sam Bankman-Fried was sentenced to 25 years in prison in March, a difference reflecting their varying levels of criminal involvement and cooperation with authorities.
Salame’s case also reveals the financial repercussions for those involved in the FTX scandal. As part of his plea deal, he must pay approximately $12 million in penalties and forfeit significant assets.
Court filings suggest that Salame, once worth millions, may be left with minimal assets post-sentencing.
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