As we gear up for week two of the Sam Bankman-Fried fraud trial, we pulled collectively a few of the juiciest bits from witnesses who took the stand final week. Among them was Gary Wang, the co-founder and CTO of FTX, who took a plea deal in December 2022. He’s anticipated to complete his cross-examination on Tuesday.
Here are another main factors from Wang’s testimony so far:
In July 2019, Bankman-Fried allegedly requested Wang and FTX’s director of engineering, Nishad Singh — who’s additionally anticipated to testify — to present FTX’s crypto buying and selling agency sister firm, Alameda Research, the power to withdraw past a stability of zero to assist pay for firm bills. The cash it was withdrawing got here from the shopper deposits and buying and selling charges FTX charged its customers.
On the identical day that the allow damaging characteristic 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 requested him “more than once” to verify Alameda by no means liquidates on FTX, so he deployed code to forestall Alameda from liquidating no matter its balances, positions in trades or damaging stability.
Wang testified that in late 2019, Bankman-Fried advised him that so long as the withdrawals have been lower than whole buying and selling income, then it was fantastic for Alameda to maintain withdrawing. At the time, Alameda’s income was between $50 million and $100 million. But on the finish of 2019, Wang realized that Alameda was dipping into FTX’s clients’ cash. He stated he flagged it to Bankman-Fried however didn’t pursue the problem additional and “trusted [SBF’s] judgment.”