Day six of the trial of Sam Bankman-Fried saw the conclusion of former FTX chief technology officer Gary Wang’s testimony and the beginning of former Alameda Research CEO Caroline Ellison’s. Wang testified about his plea deal, among other things.
According to Inner City Press on X (formerly Twitter), Assistant United States Attorney Nicolas Roos asked Wang, “At your first meeting with the government, did you admit to committing crimes with the defendant?” Wang replied that he did.
“What were you told to do?” Roos asked.
“To tell the truth or not get a 5K letter, or worse,” Wang replied.
“5K letter” refers to a motion filed by the government under Section 5K1.1 of the U.S. Sentencing Guidelines, which is the policy statement on “substantial assistance to authorities.” It allows the government to make “the appropriate reduction” to a sentence considering various forms of cooperation.
Related: Caroline Ellison blames Sam Bankman-Fried for misuse of FTX user funds at trial
U.S. Attorney for the Southern District of New York Damian Williams announced on Dec. 21, 2022, that charges were filed against Wang and Ellison “in connection with their roles in the fraud that contributed to FTX’s collapse.” The two had pleaded guilty to the charges and were cooperating with the government’s investigation.
Roos noted that Wang pleaded guilty to four charges, including conspiracy charges. “With who” did he conspire, Roos asked. “With Sam, [former FTX engineering director] Nishad [Singh] and Caroline,” Wang said.
Live tweeting of Ellison testimony will resume at 2 pm, here. Inner CIty Press is covering the case https://t.co/jsd2LKKf7U & https://t.co/cGS6liUb3n and fillings: https://t.co/Sm5clS6qXb Watch this feed – at 2 pm and beyond…
— Inner City Press (@innercitypress) October 10, 2023
According to another account of the trial, Wang said he met with government officials 18 times. The first two meetings were with agents of the Justice Department, the Federal Bureau of Investigation, the Securities and Exchange Commission and the Consumer Financial Protection Bureau, and he told them that Bankman-Fried’s Nov. 7 tweet, “FTX is fine. Assets are fine,” was true.
Wang testified that later he said that the tweet was true but misleading. It was not possible to liquidate the exchange’s FTT tokens, as a sale of that magnitude would cause the token’s price to fall, he said.
Earlier, Bankman-Fried’s defense attorney had asked Wang, “Do you know the difference between solvency and liquidity?” Wang responded that he did.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
