Wang’s testimony was part of a plea agreement with prosecutors stemming from his guilty plea filed in December 2022.
In a riveting turn of events at the ongoing criminal trial of FTX founder Sam Bankman-Fried (SBF), Gary Wang, the company’s former chief technology officer, unveiled startling revelations about the inner workings of the exchange and its sister company Alameda Research.
On October 5th, day three of the trial, Wang took the stand after a short break, disclosing critical information regarding the collaboration between FTX and Alameda, noting that they were given “special privileges from Alameda Research.
FTX Allowed Alameda to Withdraw Unlimited Funds
From Wang’s testimony, the privileges included an extensive line of credit, allowing the company to place orders directly on FTX and execute the transactions faster.
“We allowed Alameda to withdraw unlimited funds,” said Wang in response to questioning from Assistant United States Attorney Danielle Sassoon.
He also claimed that Alameda could withdraw unlimited funds from the exchange. By its collapse in November, the company had removed $8 billion from the platform and drawn $65 billion on its line of credit.
According to a series of posts on X, formally Twitter from the Inner City Press, Wang’s testimony also shed light on his involvement in various illicit activities, including wire fraud, securities commodities fraud during his tenure at FTX.
Wang further revealed that Bankman-Fried, former Alameda Research CEO Caroline Ellison and former FTX engineering director Nishad Singh were his co-conspirators in these crimes.
SBF Responsible for All Decision Making at FTX
While still on the stand, he emphasized that while he focused on coding, Bankman-Fried handled public-facing duties, including media interactions, lobbying, and discussions with investors.
He also claimed that despite not participating in coding, SBF always instructed them on what to implement in the code.
The former FTX employee clarified that despite disagreements on some of SBF’s instructions, the ultimate decision-making authority rested primarily with Bankman-Fried. It was revealed that:
“(Sam handled) speaking to the media, lobbying, talking with investors. I just coded (…) in the end it was Sam’s decision to make (regarding any disagreements).”
Wang’s testimony was part of a plea agreement with prosecutors stemming from his guilty plea filed in December 2022. It is expected that Ellison and Nishad, who also pleaded guilty to the exact criminal charges as Wang did last year, will testify against SBF before the trial concludes in November.
Former FTX Employee Found a Loophole on the Exchange
The former FTX CTO is not the only one who has taken the stand in the ongoing trial at the United States District Court for the Southern District of New York.
On the same day as Wang, another former employee of FTX and former roommate of SBF at MIT, Adam Yedidia, testified in the courtroom regarding his knowledge of the company’s misappropriation of funds. According to reports from Inner City Press, Yedidia, who worked as a software developer at FTX, resigned when he found out that Alameda had used customer deposits to pay its loans.
Before he departed from the company, the former MIT student discovered a bug in FTX’s code that provided Alameda access to FTX customer’s funds. He said the bug ensured “Alameda’s liabilities did not decrease,” resulting in a roughly $8 billion error.
He also disclosed that SBF asked him to use a social media platform called Signal to discuss the bug matter while answering questions from Assistant US Attorney Danielle Sassoon.
“He told me to use Signal. He told the entire company. It also had auto-delete. (…) He said it (auto-delete) was all down-side to keep messages around. If regulators found things they didn’t like, it could be bad for the company,” said he.
So far, these witnesses have addressed the critical part of the trial regarding FTX’s involvement with Alamada, validating the allegations that the exchange misused customer’s funds to keep the company afloat under the leadership of SBF.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
