In the culmination of his testimony, Wang, one of the co-founders of FTX, delved into his interactions with federal authorities and his interpretation of the enigmatic “FTX is fine” tweet. Day six of the trial of Sam Bankman-Fried marked the conclusion of the testimony provided by Gary Wang, the former chief technology officer at FTX, and the commencement of the testimony by Caroline Ellison, the former CEO of Alameda Research. Wang shared insights into his plea agreement, among other critical aspects.
According to a report by Inner City Press on the platform formerly known as Twitter, Nicolas Roos, the Assistant United States Attorney, posed a pointed question to Wang during his initial meeting with the government, inquiring if he had admitted to any wrongdoing in collaboration with the defendant. Wang’s response was affirmative.
Roos followed up with another inquiry, “What instructions were you given?” To which Wang promptly replied, “To speak the unvarnished truth or face the prospect of not receiving a 5K letter, or worse.”
The term “5K letter” references a motion submitted by the government under Section 5K1.1 of the U.S. Sentencing Guidelines, a policy statement related to “substantial assistance to authorities.” It permits the government to offer a reduction in the sentence based on the extent of cooperation.
Damian Williams, the U.S. Attorney for the Southern District of New York, made a significant announcement on December 21, 2022, confirming charges against Wang and Ellison, implicating them in the fraudulent activities that led to the collapse of FTX. Both individuals had already pleaded guilty to the charges and were actively cooperating with the government’s investigative efforts.
Another account of the trial revealed that Wang met with government officials on a total of 18 occasions. The initial two meetings involved agents from the Justice Department, the Federal Bureau of Investigation, the Securities and Exchange Commission, and the Consumer Financial Protection Bureau. During these encounters, he asserted the veracity of Bankman-Fried’s November 7 tweet, stating, “FTX is fine. Assets are fine.”
Wang went on to testify that he later amended his stance, acknowledging that while the tweet contained elements of truth, it was also misleading. Liquidating the FTT tokens on the exchange at that scale was deemed unfeasible, as it would inevitably result in a significant drop in the token’s value.
Earlier in the trial, Bankman-Fried’s defense attorney probed Wang with a crucial question, “Do you understand the distinction between solvency and liquidity?” Wang confidently affirmed his comprehension of the difference.
