Good day everyone,

I hope you are all well and had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. With Sam Bankman-Fried having been found guilty on seven counts of fraud, attention now turns to his former inner circle and what fate awaits the likes of Ellison, Singh, and Wang.

Sam Bankman-Fried's Friends

It has been a crazy year for Sam Bankman-Fried (SBF) and his former associates and friends from cryptocurrency exchange FTX and his other trading venture Alameda Research. With SBF having been found guilty on seven counts of fraud and facing the very real prospect of spending the rest of his life in federal prison, attention is likely to turn upon his former colleagues and co-defendants.

The three main perpetrators in question are Nishad Singh, FTX’s director of engineering, Gary Wang, the exchange’s chief technical officer, and Caroline Ellison, former CEO of FTX sister trading firm Alameda Research. All have previously pleaded guilty to fraud and conspiracy charges back in December 2022. Thanks in no small part to their cooperation and testimonies, SBF was convicted and they played a pivotal role in ensuring it happened. However, the former crypto executives are far from in the clear.

Ellison, Singh, and Wang could quite easily still end up behind bars, facing the possibility of maximum prison sentences of 110, 75, and 50 years, respectively. When they made their agreements with prosecutors back in December, they will receive 5K motions. These are letters which describe their criminal activity and conduct, and most importantly he extent of their assistance to the overall crimes. They will hope their cooperation will be enough to spare them prison time, but the trio are far from in the clear yet.

A sentencing hearing scheduled for the 28th of March, 2024, will determine their fate. U.S. District Judge Lewis Kaplan will preside over the case and determine not only the fates of the trio, but also the sentencing for SBF following his guilty verdict by a jury of his peers. The trio's letters will not recommend specific sentence lengths and that will be at the discretion of Judge Kaplan.

When looking at federal financial fraud cases it is generally the amount of money involved which influences the length of sentence. Considering that FTX and Alameda were estimated to have been involved in around $10 billion of fraud as part of their scheme, it will become a significant factor in determining the potential sentence.

Many legal experts are of the belief that the trio are likely to receive little to no prison time for their cooperation in bringing down SBF, who many have claimed is considered one of the most significant financial fraudsters in American history. Judge Kaplan will have a tough choice to make, and he could quite easily decide to make an example of Ellison, Singh, and Wang.

According to Christopher Zoukis, a legal consultant experienced in federal prison matters, they could be facing prison terms ranging from 17.5 to 21.8 years assuming there are no further departures or mitigating circumstances. He is of the belief that the cases unique circumstances and media exposure could force the hand of Judge Kaplan to make an example of the trio, leading to an unconventional sentencing approach similar to that of a cartel case.

One cavaet he has added is that if Ellison, Singh, or Wang were to receive prison sentences of less than 12.5 years they would more than likely be placed in minimum security federal prisons. These facilities are known for their dorm-style living arrangements and are considered non-violent. If the unlikely happens and the trio avoid prison terms, they may still be forced to pay restitution to the victims of the scheme. Bankman-Fried however is potentially facing decades in prison when he is sentenced in March 2024. The trio admitted to participating in fraudulent activities under SBF's direction, including the transfer of billions of dollars of FTX customers funds into the hedge fund Alameda Research.

Caroline Ellison

Considered by many as the star witness to the SBF trial, Caroline Ellison met SBF back when she took part in an internship at a Wall Street firm known as Jane Street. The hedge fund is known for its heavy use of algorithms which she excelled at. A math major at Stanford University, she was finishing up her undergraduate degree when she met the MIT graduate. Instead of pursuing her one-year master’s degree program, Ellison joined Jane Street full time.

Having spent her entire professional career as a trader and a year and a half on Jane Street’s equities desk, SBF contacted Ellison in 2018 to meet for a coffee. There he convinced her to join his fledgling, cryptocurrency-focused investment firm known as Alameda Research. She noted that SBF was initially cagey about what Alameda did and she came onboard with more experience than a lot of Alameda traders at the time. Alameda was a market maker for low-liquidity altcoins at the time.

The firm took a market-neutral approach to the industry but as it grew and developed a more participatory role in crypto was taken. Leveraged bets were placed on increasingly bullish or bearish positions for specific coins, including yield farming on decentralized finance protocols. She was appointed as co-CEO of Alameda with Sam Trabucco in October 2021 after SBF resigned from the firm. He did so to put distance between the exchange and trading shop he founded. When Trabucco left in August 2022 she became the sole CEO. SBF and Ellison began dating back in 2018 which lead to difficult power dynamic, especially after she had been promoted to CEO of Alameda Research, but theirs was an on-again off-again type  of romance.

Her father is Glenn Ellison, a Professor of Economics at Massachusetts Institute of Technology. He is also the head of the economics department and was in the role back when current Securities and Exchange Commission Chairman Gary Gensler famously taught an MIT course on blockchain. Her mother, Sara Fischer Ellison, is also an economics department lecturer at the university. Caroline Ellison may face a maximum of 110 years in federal prison for her seven charges.

Nishad Singh

Singh first met SBF back at Crystal Springs Uplands School, a prestigious private school they both attended in Northern California. He was close friends with Gabe Bankman-Fried, SBF's younger brother. Having graduated from the University of California, Berkeley, with a degree in computer science, he work at Facebook before being recruited to Alameda Research in 2017. Back then it was a five-person trading firm was based in a Berkeley, California, apartment. His role was initially to find and exploit arbitrage opportunities in crypto markets, but from there he ended up being appointed the director of engineering at FTX.

Nishad Singh was always considered a close confidant of SBF with the pair having shared multiple apartments over the years. This included a 10 person luxury penthouse in Nassau, the Bahamas. In a FTX podcast he explained his reasoning for leaving Facebook to join Alameda Research, noting that he had been doing about a month working weekends and nights at Alameda before deciding it was his preferred choice of career compared to working on applied machine learning at Facebook. Having watched SBF make a number of "super profitable and easy to understand" trades, Singh was sold on the project.

Having spent a year and a half at Alameda, he moved on to FTX due in 2019 as he felt he was allowed to code with “minimal supervision.” He has provided code to a number of Bankman-Fried-related projects, including the decentralized exchange Serum on Solana. He was rumoured to be just one of three people with access to the keys to the exchange’s matching engine. He told the courts that under the direction of SBF he wrote the computer code that effectively allowed Alameda to "borrow" tens of billions of dollars from FTX . Singh has pled guilty to five charges and he faces up to 75 years in prison.

Gary Wang

Having met SBF back in 2010 when they both attended a five-week, math-focused summer camp at Mount Holyoke College in Massachusetts, Wang reunited with SBF when they both attended MIT. Wang majored in math and computer science, with SBF studying physics. He has been described as a shady but critical player in the rise and fall of FTX, and both himself and SBF were members of the fraternity Epsilon Theta. Back in 2017 SBF travelled to Boston where Wang was working for Google, and suggested the pair of them establish their own trading firm.

Wang was instrumental in building both Alameda Research and FTX. He owned 10% of Alameda Research, and 17% of FTX. Wang claims to have built a system to aggregate prices across public flight data while working at Google. The co-founders began their startup in a three-bedroom Berkeley apartment where the downstairs served as the office. The firm moved to Hong Kong to take advantage of arbitrage opportunities in Asian bitcoin markets which included he price discrepancy between BTC in Japan and BTC everywhere else.

SBF and Wang went on to funnel funds from Alameda to build its bespoke derivatives exchange. Nishad Singh, the head of engineering at FTX, had noted that Wang was a really good mentor to him and often offered suggestions and advice to push things out on short timescales. Wang was also one of the 10 roommates in Bankman-Fried’ luxury penthouse in the Bahamas. He was also reportedly cited by Caroline Ellison as one of only four people who knew about the decision to send customer funds to Alameda. When Wang was 28 he was top of Forbes' 2022 list of the world's billionaires under 30 with a net worth of $5.9 billion. He went on to testify that with some simple tweaks to computer code they were able to take as much as $65 billion from FTX customers without them knowing. Wang has pleaded guilty to four criminal counts and he faces up to 50 years in prison.

While the SBF trial has concluded, the drama is just beginning for the team behind one of the largest frauds in crypto history. The new year will see sentencing, along with SBF potentially facing his other charges, but his former colleagues and friends will be awaiting their own fate. It promises to be an exciting couple of months ahead with March 2024 set as D-Day for the former FTX and Alameda Research crew.

Have a great day,

Peace. CryptoGod-1.

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