The disgraced former crypto executive Sam Bankman-Fried has been sentenced to 25 years in prison, marking the end of one of the biggest financial frauds in history. But what about the people who were close to him and his failed cryptocurrency exchange FTX?
It wasn’t that long ago that Bankman-Fried, Caroline Ellison, Nishad Singh, and Gary Wang were living together, enjoying a life of luxury in the Bahamas. After the FTX collapse, they testified against Bankman-Fried, also known as SBF, and pleaded guilty to fraud.
They are now banned from serving as officers or directors of public companies and from engaging in crypto trading
Let’s find out more about SBF’s buddies here.
Caroline Ellison
Caroline Ellison, 30, is Sam Bankman-Fried’s ex-girlfriend and former CEO of Alamdea, FTX’s sister company. She was the prosecution’s star witness against Bankman-Fried.
She admitted that she committed fraud and conspiracy with Bankman-Fried and others and that they defrauded FTX customers and investors. The testimony Ellison gave against SBF accused him of instructing her to hide Alameda’s obligations to FTX by making misleading balance sheets. He was accused of choosing risky investments despite knowing that his customers’ funds would be depleted. She also told the jury that Bankman-Fried wanted to be the President of the United States one day.
The daughter of MIT professors and a Stanford University graduate, Ellison has tried to reduce whatever sentence she eventually faces by testifying against Bankman-Fried. And their romantic relationship adds some complexity to the case.
Eric Chaffee, a Case Western Reserve University law professor and director of the Financial Integrity Institute, said Ellison testified against Bankman-Fried in the hope of leniency in her own sentencing. She has pleaded guilty to seven criminal charges
“It is likely that she will receive a reduced sentence,” Chaffee said, “but with the high-profile nature of the case, that is far from certain.”
Gary Wang
Gary Wang and Sam Bankman-Fried both attended MIT, where Wang majored in math and computer science, and Bankman-Fried majored in physics.
Bankman-Fried and Wang co-founded FTX in 2019. Wang has also pleaded guilty to four criminal counts for assisting Bankman-Fried in defrauding customers, and has also been a cooperating witness with prosecutors in hopes of receiving a reduced sentence.
In his testimony, the 30-year-old Wang described himself as a coder. He admitted that he and his colleagues were able to modify code to allow Alameda Research to take up funds from FTX customers without their knowledge.
“Prosecutors are expected to recommend that the trial judge take Wang’s cooperation into account when sentencing him,” Chaffee said. “However, because of the high-profile nature of the case, he is still likely to face significant jail time.”
Nishad Singh
SBF’s younger brother, Gabe Bankman-Fried, is friends with Nishad Singh. A graduate of the University of California, Berkeley, Singh started his career at Facebook and joined Alameda Research in 2017. He became chief engineer of FTX, where he played a pivotal role in committing financial fraud.
Similarly to Gary Wang, Nishad Singh was a cooperating witness for prosecutors. He testified that Bankman-Fried asked him to write code that allowed Alameda to borrow billions of dollars from FTX. Although he admitted to defrauding customers and participating in money laundering, he maintained that he did not steal money. During his testimony, he said he lost faith in Bankman-Fried and wanted to resign from FTX — but he couldn’t as he thought his departure could harm the company.
Singh, 27, who has pleaded guilty to five charges, testified that he considered suicide after the FTX collapse.
“This is very common with white-collar criminals. They often lack experience with the criminal justice system, and as a result, they are typically shocked when they are prosecuted,” Chaffee said. “Assuming the reports of Singh’s response to the collapse of FTX are true and believed, the judge may take this into account when determining his sentence because it potentially shows remorse.”