Wang Unfolds SBF’s Comingling Of Funds From FTX & Alameda

Sam Bankman-fried’s co-founder uncovers interchanging of funds and losses between both firms.
Wang Unfolds SBF’s Comingling Of Funds From FTX & Alameda

On the fourth day of trial, Gary Wang shared that SBF has been majorly blending and conflicting assets between the FTX exchange and Alameda Research.

Wang recalled that while matching the balance of the exchange, he found a major hole of $8 billion, which reflected a direction to Alameda Research. The total balance on FTX was short and became whole only after adding the total Alameda accounts, he noted.

In answering to government prosecutors, Wang testified that Nishad Singh – another senior exec at FTX – told him that the balance from ‘korean account’, pointing to “fiat@,” is reassigned in FTX’s internal database, hence adding to the total assets of the exchange. For a reminder, “fiat@” was a database that recorded FTX deposits directed towards Alameda Research accounts. 

When Wang told Sam about the deep hole in the exchange balance, Sam absurdly said that the figure was correct.

The government prosecutors’ questioning found out the assumed interrelation between FTX and Alameda as Wang confirmed that SBF gave special treatments to Alameda accounts in every possible way.

Alameda had too many benefits over the exchange that other traders could not even get closer to; as such, its positions were allowed to go negative many times instead of auto-liquidation. Alameda also had a huge credit line in billions of dollars, which is usually in the few millions for other traders.

While allowing Alameda to withdraw whatever amount it wanted, SBF told the FTX team in 2019 that the amount should not exceed FTX’s revenue. However, Wang was surprised by checking that in early 2020, the FTX balance was negative $200 million while revenue was roughly around $150 million. In between all this, no one could figure out the actual balance of Alameda.

At that very moment, enter the FTX exchange’s native FTT token. Wang was told by SBF that the FTT balance should also need to be accounted for in the exchange’s total balance. This misdemeanor also resulted in the crash of the FTT token.

Wang further said that Alameda often incurred FTX’s losses by injecting its profits into the exchange. On his best, Wang can lastly summarize that Alameda owed FTX nearly $11 billion, which includes $3 billion of direct borrowings from the exchange and the other $8 billion from felonious “fiat@” funds. 

Also Read: SBF Trial: FTX Dev And Co-founder Testifies Against ‘Friend’

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