According to reports, FTX co-founder Gary Wang is being held under supervision by Bahamian authorities alongside Sam Bankman-Fried (SBF). The pair are also being investigated by the country’s financial crimes unit.
Bahamas law enforcement has been probing SBF’s soon-to-be-bankrupt exchange since its collapse last week and, according to an official notice, is “working closely with the Bahamas Securities Commission (SCB) to investigate if any criminal misconduct occurred.”
Early last week, withdrawals of customer assets from FTX were frozen. However, the SCB did insist that accounts registered in the Bahamas will still be able to access their funds.
Now it looks like things have kicked up another notch with SBF and Wang being detained before they could flee to Dubai.
Protos contacted assistant superintendent with the Bahamian Financial Crimes Unit, Anthony McCartney but was told, “We can’t give any information because investigations are ongoing.”
Who is the mysterious Gary Wang?
SBF occasionally mentions that he founded FTX alongside Gary Wang in 2019. Wang is also the firm’s chief technology officer and is an advisor to Sequoia Capital, an investment fund that invested in various technology companies including DoorDash, Zoom, Apple and AirBnB.
His biography on Forbes claims that he graduated from MIT, worked at Google, and had a 16% share of FTX. Unfortunately, there’s very little information beyond that available online, although some have speculated that he has a GitHub.
Wang and his connection with Sequoia may also explain the origins and meteoric rise of SBF. He’s often claimed that he made his money arbitraging bitcoin in 2017 by buying it in the US and selling it in Japan.
However, as Marc Cohodes recently pointed out, this would have required a significant amount of capital to pull off effectively. SBF claimed that he was pulling in around $1 million every day over the course of around five weeks but for this to have been possible, he would have needed to buy bitcoin at $18,000 and sell at around $19,000 with an initial capital injection of at least $18 million.
Read more: Can FTX tokenize its own bankruptcy?
So, this begs the question: Where did SBF get his $18 million to execute the Kimchi trade? A Forbes list of investors who’ve been most severely hit by FTX’s bankruptcy may give us a clue. And indeed, one of the largest investors is Gary Wang’s Sequoia Capital with a stake of 1.1% and an estimated investment of $200 million.