Wang Testifies About Fraud Committed by Sam Bankman-Fried
The trial of Sam Bankman-Fried (SBF) continued on October 6 with Gary Wang, FTX Co-founder and SBF’s associate, taking the stand once again. This time, Wang provided more specific testimony as the prosecution presented additional evidence against the defendant.
Alameda Research’s “Special Privileges”
According to Inner City Press, which was present at the trial, Wang confirmed that Alameda Research had “special privileges” granted by FTX. The prosecution had previously introduced evidence of a code on the FTX wallet page that allowed users to go above their balance if they checked the “allow negative” command. This code enabled Alameda to trade more than what it had in its account and gave the firm a trading advantage over others. Wang stated that this privilege was kept secret and not disclosed as SBF had claimed.
Unlimited Withdrawals and Negative Balances
Wang revealed that Alameda used this “special privilege” to withdraw nearly $8 billion in fiat and crypto, which actually belonged to FTX’s customers. The “allow negative” code allowed Alameda to withdraw unlimited amounts since July 2019. Additionally, Wang confirmed that Alameda had a negative balance in 2019, yet SBF authorized the firm to withdraw up to $100 million. At one point, Alameda’s negative balance exceeded FTX’s revenue by over $200 million.
FTX’s Misrepresented Relationship with Alameda
SBF had always portrayed Alameda Research as a liquidity provider for FTX. However, Wang’s testimony contradicts this narrative, revealing that it was actually Alameda who kept withdrawing funds from FTX, including part of the $65 billion line of credit authorized by SBF. The prosecution presented a tweet from SBF in 2019 where he claimed that Alameda’s account was just like everyone else’s, further highlighting the misrepresentation.
Prosecution Continues with Witnesses
The trial will resume next week on October 10, with the prosecution expected to call more witnesses to testify.
Hot Take: Sam Bankman-Fried Faces Damning Evidence
The ongoing trial of Sam Bankman-Fried has revealed damning evidence against him, as testified by Gary Wang, FTX Co-founder. Wang confirmed that Alameda Research had “special privileges” granted by FTX, allowing them to withdraw billions of dollars belonging to FTX’s customers. This revelation contradicts SBF’s claims about the relationship between FTX and Alameda. The trial is set to continue, and it remains to be seen how this evidence will impact the final verdict.
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