The ongoing trial of FTX co-founder Sam Bankman-Fried has turned into a “friends’ arena” on Thursday as Sam’s so-called friends oddly testified against him.
While yesterday was called off with the unfinished testimony of Yedida, he was present in the courtroom and continued speaking regarding his role in the crash of the FTX exchange as a developer.
Yedida resumed testifying that he designed an automated system that sends Alameda Research’s wire transfers directly to FTX customers’ accounts. The transfers were also recorded in an internal database entry called “fiat@.”
The developer friend of SBF also said that a bug in the code overstated Alameda’s liabilities to FTX by $8 billion.
After Yedida, Paradigm co-founder Matt Huang came forward to testify, saying that the FTX exchange’s initial yet rapid growth attracted him to invest in the firm. Huang was, however, concerned about the lack of a formal governance structure of the company.
Paradigm invested a total of $278 million into FTX through two funding rounds which “We have marked it to zero,” Huang said in the courtroom. The venture capitalist also recognized being told by SBF that Alameda did not have any preferential treatment on FTX.
To an astonishing but non-exciting surprise, the not-much-spoken second co-founder of FTX, Gary Wang, came to testify against Sam on the third day.
Wang said that Alameda Research was given a special treat where it can withdraw funds even if the firm had a negative balance, all under Sam’s direction. The funds would come from FTX exchange’s customer deposits, Wang noted.
As FTX co-founder, Wang has been unseen and unspoken since the exchange’s collapse, answering questions in a hurry. He was speaking so readily and fast that he was asked to slow down.
Besides being a co-founder, Wang was also a very good friend of Sam; as such, both were even living together in a $35 million penthouse with Yedida and other senior executive-cum friends from FTX.
While testifying, Wang also said that Alameda Research had a credit line of $65 billion as a market maker on the FTX exchange, while it was in the single or double digits millions for other market makers.
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