Ex-FTX Developer Testifies About Code Glitch and Misuse of Funds
During the trial of Sam Bankman-Fried, his close friend and former employee Adam Yedidia took the stand to provide his testimony. Yedidia worked as an intern at Alameda Research before joining FTX in Hong Kong. He also resided with the FTX executive team in the Bahamas.
Allegations of Misuse of Client Funds and Bankruptcy
Yedidia revealed that he received a call informing him about Alameda misusing client funds, which led him to resign. Shortly after, FTX faced liquidity challenges and struggled to process client withdrawals. Yedidia’s questioning was broadcast on X by Matthew Russell Lee from Inner City Press. He disclosed that FTX occasionally moved client deposits to an Alameda Research account without their knowledge.
$8 Billion Code Glitch and Communication Issues
Yedidia discovered a technical glitch that resulted in an $8 billion underestimation of Alameda’s liabilities. When he raised concerns to Bankman-Fried, he was reassured that everything was fine. After fixing the error himself, Yedidia informed Bankman-Fried through Signal, but the conversation was set to auto-delete and is now lost. Yedidia mentioned Bankman-Fried’s advice to use the auto-delete feature due to its perceived riskiness.
Shift in Loyalty and Intimate Encounters
Upon learning that Alameda used client deposits to settle its debts, Yedidia changed his stance and considered it a wrongdoing. He also shared details about Bankman-Fried’s casual intimate encounters with Alameda’s CEO, Caroline Ellison. Yedidia advised against pursuing a relationship when Bankman-Fried sought his opinion.
Losses and Trust in Bankman-Fried
Another witness, U.K. trader Marc-Antoine Julliard, testified about losing around £100,000 due to the FTX debacle. Julliard trusted Bankman-Fried and believed FTX to be a reliable exchange based on the updates he saw on X. Unfortunately, his decision to delay fund withdrawal turned out to be a mistake.
Hot Take: Revelations of Misuse of Funds and Communication Issues Shake FTX Trial
The trial of Sam Bankman-Fried continues with Adam Yedidia’s testimony shedding light on allegations of misuse of client funds and an $8 billion code glitch at FTX. Yedidia’s resignation after discovering the mishandling of funds has raised concerns about the company’s practices. The lost conversation between Yedidia and Bankman-Fried, along with the use of auto-delete messages, adds to the communication issues faced by FTX. Additionally, revelations about intimate encounters between Bankman-Fried and Alameda’s CEO have further complicated the situation. The testimony from U.K. trader Marc-Antoine Julliard highlights the impact of the FTX debacle on investors’ trust. These revelations could have significant consequences for FTX and its reputation in the crypto industry.
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