SBF trial day 4: witness recounts Alameda’s $65b credit line and alleged unlimited FTX withdrawals

Gary Wang told prosecutors that Alameda Research withdrew more value from FTX than the exchange made from fees, owing $20 billion once, while Judge Kaplan reprimanded defense attorneys for repetitive questioning on SBF’s trial day 4.

Former FTX CTO Gary Wang named founder Sam Bankman-Fried as a co-conspirator of fraud on day 3 of SBF’s trial. Paradigm’s Matt Huang said his VC marked down $278 million invested in Sam’s crypto exchange and Adam Yedidia detailed a “code error” that fostered Alameda’s unusual overcast on customer assets.

Amid caches of overruled defense objections and the prosecution’s search for smoking guns, curtains closed on the third day of Sam Bankman-Fried’s trial for fraud.

The former FTX CTO testified to acts of wire fraud, securities fraud, and commodities fraud. Wang, who worked for both FTX and Alameda, said Caroline Ellison, Nishad Singh, and Sam Bankman-Fried were in on it too.

SBF has denied criminal wrongdoing, but the other three pled guilty and reached deals with the government to testify.

Former FTX co-CEO Sam Trabucco, somehow, remains disconnected from the criminal proceedings.

Alameda opened trades with negative balances – witness Wang

Federal prosecutors resumed the examination of Wang, diving into Alameda’s trading on FTX’s platform and novel treatments reserved exclusively for SBF’s crypto hedge fund.

Wang attested to an “allow negative” bypass enabled on Alameda’s FTX account, which allowed only Alameda to secretly trade beyond its balance and eventually withdraw $8 billion in customer assets, both fiat and crypto like Bitcoin (BTC) and FTX Tokens (FTT), Wang explained.

Wang said Alameda could enter positions whenever they liked even if the firm’s account on FTX was below zero, indicating the hedge fund experienced heavy losses and often lost a lot of cash.

In Going Infinite, author Michael Lewis said it cost Bankman-Fried and FTX $500 million per day to keep Alamada running at one point.

Former FTX director of engineering Nishad Singh, who pled guilty, added the allow negative code to FTX’s engine in July 2019, at SBF’s behest, according to the witness. FTX launched i

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Author: Naga Avan-Nomayo

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