Gary Wang Testifies on FTX and Alameda Research Connection
Gary Wang, the co-founder and former chief technology officer of FTX, appeared in court to testify on the relationship between the crypto exchange and Alameda Research. Wang testified that Alameda’s account on FTX was the only one authorized to trade more than it had available, thanks to a feature called “allow negative.” He claimed that former CEO Sam “SBF” Bankman-Fried instructed him and former FTX engineering director Nishad Singh to implement this feature in 2019.
According to Wang, the “allow negative” addition allowed Alameda to achieve a negative balance greater than FTX’s revenue in 2020. He also stated that Bankman-Fried provided Alameda with a $65 billion line of credit despite publicly denying any special relationship between the two firms. Wang revealed that Bankman-Fried asked him about the bug in the system during a meeting in the Bahamas office.
Wang further testified that Bankman-Fried claimed Alameda’s privileges were related to FTX Token (FTT) trading when its account balance was below zero. He stated that Alameda could withdraw funds directly from FTX. These revelations are crucial to the ongoing criminal trial of Bankman-Fried.
Allegations Against Bankman-Fried
The prosecution alleges that Bankman-Fried used FTX user funds at Alameda without customer consent. During his testimony, Wang admitted to committing crimes alongside Bankman-Fried and former Alameda CEO Caroline Ellison. Sheila Warren, CEO of the Crypto Council for Innovation, emphasized that the trial is not about crypto but rather about Bankman-Fried’s actions for personal gain.
Continuation of Trial
Bankman-Fried’s criminal trial is expected to continue until November, with Ellison and Singh likely to testify against him. Bankman-Fried remains in jail after his bail was revoked by Judge Lewis Kaplan in August. It is unclear whether he will take the stand himself.
Hot Take: Further Damaging Testimony Against Bankman-Fried
The ongoing trial of former FTX CEO Sam “SBF” Bankman-Fried continues to reveal damaging evidence against him. Gary Wang’s testimony sheds light on the connection between FTX and Alameda Research, indicating that Bankman-Fried allowed Alameda to trade more than it had available through a special feature on FTX. This contradicts Bankman-Fried’s public statements denying any preferential treatment for Alameda. As the trial progresses, it becomes increasingly evident that Bankman-Fried prioritized his own interests over those of FTX and its users. The outcome of this trial will have significant implications for the reputation and future of both Bankman-Fried and the crypto industry as a whole.
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