Gary Wang – who’s beforehand pleaded responsible to comparable expenses to what Bankman-Fried faces – testified that Bankman-Fried directed him to write down code permitting Alameda Analysis to have a destructive steadiness on FTX way back to July 2019.
In the end Alameda took and spent not less than $8 billion of FTX clients’ cash, Wang stated.
Wang opened by saying he dedicated crimes, did so with Bankman-Fried, Caroline Ellison and Nishad Singh and that he hoped for no jail time on account of his cooperation.
FTX had an insurance coverage fund with an quantity listed on its web site, however this quantity was basically a randomly generated determine, Wang stated.
For some time, FTX executives didn’t really understand how a lot Alameda owed its clients due to a software program bug, Adam Yedidia stated. The bug overstated the quantity owed by $8 billion (basically twice the true quantity).
Alameda used FTX buyer deposits to pay again its lenders, Yedidia stated. Wang later confirmed that Alameda had returned lenders’ funds and that these funds “got here from FTX clients.”
FTX introduced itself as a secure custodian to traders like Paradigm, Matt Huang stated.
Equally, Bankman-Fried advised Paradigm that Alameda had no preferential therapy, Huang stated. Wang later stated Alameda did obtain particular therapy (see level 1).
At no level did Bankman-Fried or anybody at FTX inform Paradigm that Alameda was exempt from its auto-liquidation characteristic, Huang stated.
Paradigm has marked its $278 million funding in FTX to zero, Huang stated.