Gary Wang Reveals FTX’s Special Treatment of Alameda Research
In the ongoing criminal trial of former FTX CEO Sam Bankman-Fried, co-founder and former CTO Gary Wang provided testimony regarding the relationship between FTX and Alameda Research. Wang disclosed that Alameda Research had been granted “special privileges” on the FTX exchange.
Alameda Research’s “Allow Negative” Feature
According to Wang’s testimony, Alameda Research was allowed to trade with more funds than it actually had available on FTX. This was made possible through the integration of an “allow negative” feature, which permitted Alameda to hold a negative balance exceeding FTX’s revenue. Wang claimed that he increased Alameda’s line of credit up to $65 billion as instructed by Bankman-Fried.
Subscribe to our Social Media for Exclusive Crypto News and Insights 24/7!
Customer Funds Used by Alameda
When questioned about the source of these funds, Wang stated that they came from FTX’s customers. He confirmed that the customers did not authorize their funds to be used by Alameda Research in this manner.
Bankman-Fried’s Alleged Deception
Wang also revealed that Bankman-Fried made public statements denying any use of FTX funds by Alameda Research. However, Wang testified that Bankman-Fried ordered the inclusion of the “allow negative” feature on the same day he tweeted about Alameda not using funds from FTX.
Admission of Fraud-Related Crimes
In addition to his testimony about FTX and Alameda, Wang admitted to committing fraud-related crimes during his time at FTX. The trial is expected to continue until November, with the possibility of other former executives taking the stand.
Hot Take: FTX’s Alleged Favoritism Raises Concerns
The revelations from Gary Wang’s testimony shed light on the alleged special treatment given to Alameda Research by FTX. This raises concerns about the transparency and fairness of the exchange’s operations. The trial will likely have significant implications for both FTX and Alameda, as it exposes potential misconduct and deception within the cryptocurrency industry.
