- The SBF trial has taken a surprising turn with the Co-founder unveiling hidden privileges for Alameda.
- Contradictions have emerged as SBF’s statements have clashed with the evidence presented.
- Alameda’s negative balance has been a shocker, contrasting starkly with FTX’s revenue.
The Sam Bankman-Fried (SBF) trial, which finished its fourth day on October 6, featured the return of Gary Wang, co-founder of FTX and an associate of SBF, taking the witness stand once again to continue the proceedings that began the previous day.
Wang Reveals the Extent of Fraud Involving Sam Bankman-Fried
In this latest testimony, Wang provided more specific details, shedding light on the extent of fraud associated with Sam Bankman-Fried. During the trial, Wang disclosed that Alameda Research had enjoyed certain “special privileges” within the FTX ecosystem.
The prosecution had previously presented evidence of a code linked to the FTX wallet page, which had the capability to monitor the values stored in a user’s wallet. Crucially, this code included an “allow negative” command.
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When enabled, it permitted users to exceed their account balances, effectively allowing Alameda to engage in trading activities that surpassed the funds available in its account. Allegedly, Alameda had access to a substantial “large line of credit,” which enabled them to execute trades at an accelerated pace compared to other market participants.
Alameda Siphoned $8 Billion from FTXโs Customer Assets
Wang pointed out that this information was concealed and never publicly disclosed, contradicting SBF’s earlier statements regarding the permissions granted to Alameda. Wang further revealed that Alameda had utilized this “special privilege” to withdraw nearly $8 billion in both fiat and cryptocurrency.
These funds were purportedly the property of FTX’s customers. With the “allow negative” code in operation, there were no restrictions on the amount Alameda could withdraw. This practice persisted since July 2019 when Nishad Singh, FTX’s Director of Engineering, introduced the code.
Despite this, Bankman-Fried had authorized Alameda to withdraw up to $100 million. The magnitude of Alameda’s negative balance had reached staggering proportions, exceeding FTX’s revenue at certain points.
On the Flipside
- The true intentions and implications of the “special privilege” may be subject to interpretation.
- The substantial negative balance of Alameda Research, proponents of the firm point out that this negative balance was not necessarily indicative of wrongdoing.
Why This Matters
Gary Wang’s revelations regarding Alameda Research’s ‘special privileges’ at FTX send shockwaves through the crypto sphere. This exposรฉ underscores the need for transparency and fairness in cryptocurrency exchanges, raising questions about the true extent of undisclosed advantages enjoyed by influential players.
To learn more about the related event surrounding FTX’s $8 billion deficit, read here:ย
Witness Sheds Light on FTX’s Shocking $8 Billion Deficit
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