HomeCryptoFTX bankruptcy: verdict for the ex-executives not before October

FTX bankruptcy: verdict for the ex-executives not before October

The verdict in the case of the bankruptcy of FTX against the former executives of the exchange will not arrive before October. 

This is what emerges from a note filed yesterday by Judge Lewis Kaplan at the United States District Court for the Southern District of New York.

The former executives of FTX and the bankruptcy ruling expected in October

The sentence against the founder and former CEO of the FTX group, Sam Bankman-Fired, has already been pronounced in March. SBF has been sentenced to 25 years in prison. 

In his case, however, there has always been a refusal to plead guilty and to cooperate with the authorities. 

The other former executives of the company under accusation are in particular the co-founder Gary Wang, the former technical director Nishad Singh, and the former CEO of Alameda Research Caroline Ellison.

These former FTX executives instead opted practically from the beginning for the guilty plea and cooperation with the authorities. It is therefore possible that they may benefit from a reduced sentence. 

The note presented by Judge Lewis Kaplan states that the hearing for the sentence against Wang is scheduled for November 20, while the one for the sentence against Singh will be held on October 30. However, there is still no mention of the date for the hearing for the sentence against Caroline Ellison

FTX bankruptcy saga: The sentence for the crimes committed will arrive in October

Wang and Ellison pleaded guilty almost immediately, admitting to having a role in the collapse of the exchange that was shut down in 2022. Singh pleaded guilty at a later time. 

The crimes they are accused of are fraud, money laundering, and others. 

SBF has been found guilty of seven charges, for fraud and conspiracy, and more or less the same charges have been brought against Wang, Singh, and Ellison.

However, there are a couple of significant differences. 

The first is that SBF was actually the boss, so he had greater responsibilities and was the true instigator of those crimes. It is even possible that Wang, Singh, and Ellison will be recognized as mere executors of SBF’s conspiratorial plan. 

The second is that SBF never tried to obtain sentence reductions. In fact, he doesn’t even seem to have regretted committing all those crimes. 

When Judge Kaplan presented the reasons for the 25-year prison sentence, he emphasized this very point, which evidently constituted an aggravating factor that could have led him to increase the penalty. 

In short, Wang, Singh, and Ellison were probably just supporting actors, even if with leading roles, and above all, it seems that they voluntarily provided useful information to the authorities against SBF in an attempt to obtain a reduced sentence. 

The other dirigente

Furthermore, there is another precedent.

The ex co-CEO of FTX Digital Markets, Ryan Salame, had pleaded guilty, but chose not to cooperate much with the authorities. 

The result was a sentence of 90 months (seven and a half years), handed down by the same judge Kaplan. Salame is currently still at large, but he is expected to turn himself in to the authorities on August 29.

This suggests that the sentence that will be handed down to Wang, Singh, and Ellison, if they are found guilty, could be lower, even though Caroline Ellison’s case is slightly different. In fact, the judge has not yet set the date for her sentencing hearing. 

Ellison in fact was the CEO of Alameda Research, therefore had administrative responsibilities regarding this company, higher than those of Wang, Singh who were only executives reporting to SBF.

Furthermore, Ellison had also been for a certain period the partner of SBF, so she might have had a greater role of complicity in the conspiracy of which Bankman-Fried has been accused.

The funds

To all this, it should be added that the bankruptcy trustee of FTX, John J. Ray III, has managed to gather sufficient funds to repay the creditors even at 110%.

So all the funds held by the exchange, if calculated in dollars, have been recovered. 

It should be noted, however, that this is precisely a calculation made in dollars, and not in crypto, taking as a starting point the value at the time of the collapse (November 2022) when the bear-market was at its bottom. 

This suggests that SBF, Caroline Ellison, Gary Wang, and Nishad Singh might not have managed to set aside many funds misappropriated from the company. 

It is known that shortly after the withdrawal closure on the exchange, someone managed to steal many funds, but it is still unclear who did it, as it seems that it was a hack. 

On the other hand, however, it is also likely that they managed to set something aside during the years of splendor of the exchange, which had become one of the largest in the world. 

So once out of prison they might also have enough funds to live off, even if perhaps not in full opulence. 

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".