FTX Executive Develops Software to Aid U.S. Fraud Investigations

By Luc Cohen

NEW YORK (Reuters) – The former FTX executive, Gary Wang, who created software that allowed his imprisoned boss, Sam Bankman-Fried, to steal billions from cryptocurrency customers, is developing tools to help the U.S. government uncover fraud in the stock market.

This was revealed in a Wednesday court filing as prosecutors sought leniency for Wang before his scheduled sentencing on November 20 by U.S. District Judge Lewis Kaplan in Manhattan.

In addition to stock market fraud detection, Wang is also creating a tool to identify crime on cryptocurrency exchanges. The U.S. Attorney's Office in Manhattan noted that Wang’s proactive approach distinguishes his cooperation, stating: "The tool has sufficient potential value to the government."

Sam Bankman-Fried, aged 32, is currently serving a 25-year prison sentence after a jury found him guilty of stealing $8 billion from customers to support his hedge fund, Alameda Research. He is appealing both his conviction and sentence.

Wang, who is in his early 30s, will be the final member of Bankman-Fried's inner circle to be sentenced after the collapse of FTX in November 2022.

Other members of the circle include Wang’s former girlfriend, Caroline Ellison, who was sentenced to two years in September, and Nishad Singh, who avoided prison last month after pleading guilty.

During Bankman-Fried's trial, Wang testified that he was instructed to modify FTX’s software code to grant Alameda special withdrawal privileges, allowing the fund to secretly extract billions from the exchange.

Last week, Wang's attorney, Ilan Graff, urged Judge Kaplan to consider his client's cooperation and assistance to prosecutors as a reason to avoid prison time.

Many details regarding Wang's software tools were redacted from the court filing, as public disclosure could compromise their effectiveness, according to prosecutors.