As we gear up for week two of the Sam Bankman-Fried fraud trial, we pulled together some of the juiciest bits from witnesses who took the stand last week. Among them was Gary Wang, the co-founder and CTO of FTX, who took a plea deal in December 2022. He’s expected to finish his cross-examination on Tuesday.
Here are some other major points from Wang’s testimony so far:
In July 2019, Bankman-Fried allegedly asked Wang and FTX’s director of engineering, Nishad Singh — who’s also expected to testify — to give FTX’s crypto trading firm sister company, Alameda Research, the ability to withdraw beyond a balance of zero to help pay for company expenses. The money it was withdrawing came from the customer deposits and trading fees FTX charged its users.
On the same day that the enable negative feature was added, prosecutors shared that Bankman-Fried tweeted, “Alameda is a liquidity provider on FTX but their account is just like everyone else’s”:
Wang testified that SBF asked him “more than once” to make sure Alameda never liquidates on FTX, so he deployed code to prevent Alameda from liquidating regardless of its balances, positions in trades or negative balance.
Wang testified that in late 2019, Bankman-Fried told him that as long as the withdrawals were less than total trading revenue, then it was fine for Alameda to keep withdrawing. At the time, Alameda’s revenue was between $50 million and $100 million. But at the end of 2019, Wang learned that Alameda was dipping into FTX’s customers’ money. He said he flagged it to Bankman-Fried but didn’t pursue the issue further and “trusted [SBF’s] judgment.”
Source @TechCrunch
