FTX co-founder Gary Wang drops $65bn bombshell — who is SBF’s star coder?

FTX co-founder Gary Wang is testifying at the trial deciding the fate of his former friend and co-founder Sam Bankman-Fried, who is facing fraud and conspiracy charges.

He said on Thursday that Bankman-Fried knew of the existence of a back door that funnelled FTX client money to Alameda, the hedge fund founded by Bankman-Fried — as did former Alameda CEO Caroline Ellison, and FTX head of engineering Nishad Singh.

“We allowed Alameda to withdraw unlimited funds,” he explained to prosecutors on Thursday. Today, according to reports of his court appearance, he said Alameda Research was given a $65 billion line of credit on FTX.

Who is Gary Wang?

Wang, a maths whiz and coding specialist, is the quiet son of Chinese immigrants. He and Bankman-Fried were roommates at Massachusetts Institute of Technology for three years.

“Gary was a genius,” said Michael Lewis in the chronicle of Bankman-Fried, “Going Infinite: The Rise and Fall of a New Tycoon.” The book is based on Bankman-Fried’s account of events before the collapse and was published on October 3.

In 2018, Lewis wrote, Bankman-Fried “learned that if he asked Gary to create a crypto futures exchange, he could do it in a month, and it would be more reliable and less risky for its users than any existing exchange.”

The coder’s other achievements include the invention of a liquidation engine that would enable crypto exchanges to offer futures products without running the risk of being left on the hook for losses — a feature later adopted by exchanges including Binance and Kraken.

He also developed a “cross-margin” feature that allowed customers to use a mix of cryptocurrencies as collateral, according to Bloomberg.

“If Nishad [Singh] got hit by a bus, the whole company would be done. Same issue with Gary,” an FTX executive was quoted as saying in court documents.

Wang has pleaded guilty to wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit commodities fraud.

A quiet man

Born in China, Wang emigrated to the United States at the age of eight and went to high school at Cherry Hill, New Jersey.

He met Bankman-Fried at math camp. The two became friends, then eventually roommates at the Massachusetts Institute of Technology, in Epsilon Theta, a fraternity known for organising game nights.

“Even there he stood out,” wrote Lewis. “Among shy, socially awkward introverts, Gary was always the most shy, the most socially awkward, and the most introverted.”

But Bankman-Fried liked him.

“Despite being very quiet, he seemed not terribly scared of the world,” he told Lewis. “He was very smart. He was good at games, so could work on things that were not super literal.”

Wang’s quietness could be unnerving.

“People who worked side by side with him for months would come away convinced that he simply didn’t speak,” Bankman-Fried said, according to Lewis.

After graduating Wang flubbed an interview at Jane Street “by not speaking,” Lewis wrote.

After a brief stint at Google Flights, Wang was recruited by Bankman-Fried to help him launch Alameda Research.

The three-person team — composed of Bankman-Fried, Wang, and Alameda co-founder Tara Mac Auley — set their offices up in a three-bedroom apartment in Berkeley.

“He was bored as shit at Google Flights,” said Sam, according to Lewis. “After a few hours he says he’s probably in.”

“Gary, basically all by himself, [wrote] the code for an entire quantitative system,” wrote Lewis. The firm soon started generating “several million dollars in profits.”

Working at FTX

By April 2022, Forbes reported that Wang was worth $5.9 billion. He was 28 years old.

Most of Wang’s fortune was derived from his 16% stake in FTX, his 10% stake in Alameda, and his share of FTX’s FTT tokens.

“Gary was always extremely distant from an employee standpoint, he would most often never be in the office,” a source familiar with Alameda’s and FTX’s operations told The Block. “He liked to work from home, he was pretty much the only person that this was okay [for]. Everyone else always had to be in the office, but Gary always had the exception.”

“Gary was just a weapon to be deployed,” the source told the news organisation.

An organisational chart put together by FTX in-house psychiatrist George Lerner and published by Lewis shows Wang alone in his own box. FTX engineers were instructed to report to Singh instead.

Wang’s lawyers did not return requests for comment.

Tom Carreras is DL News’ Markets Correspondent. He is based in Costa Rica. For any tips regarding the SBF trial, you can reach him at tcarreras@dlnews.com.