Sam Bankman-Fried Trial Update: The Money Belonged to Customers,’ FTX Co-Founder Reveals Shocking Details
The post Sam Bankman-Fried Trial Update: The Money Belonged to Customers,’ FTX Co-Founder Reveals Shocking Details appeared first on Coinpedia Fintech News
In a high-profile trial that captured the cryptocurrency community’s attention, Gary Wang, co-founder and former Chief Technology Officer (CTO) of FTX, took the stand, shedding light on allegations that have sent shockwaves through the industry.
Assistant U.S. Attorney Nathan Rehn had asserted in his opening statement that Sam Bankman-Fried, the head of the now-defunct crypto exchange, misappropriated at least $10 billion from numerous customers and investors.
The trial’s spotlight shone brightest on its third day when Wang addressed the court. Wang’s testimony delved deeper into the allegations reverberating through the cryptocurrency community.
As reported by Daily Mail, Wang, as part of his plea deal, has pleaded guilty to wire fraud, commodities fraud, and securities fraud. In his testimony, he disclosed that FTX had been siphoning funds from its customers for three years before its eventual collapse. The debts owed by Alameda to FTX surged from less than $100 million in 2019 to a staggering $8 billion by November 2022, coinciding with the exchange’s demise.
Wang’s testimony aligned with that of another former associate, Adam Yedidia, who was also a friend and classmate of Bankman-Fried. Yedidia revealed that Bankman-Fried had expressed private concerns about a potential $8 billion deficit at FTX from loans to Alameda. This revelation came five months before the collapse of both companies.
When Wang was asked, “Did you believe FTX or Alameda Research was allowed to use or spend customer money?’ Wang replied: ‘No. The money belonged to customers, and customers did not permit us.’
Bankman-Fried told his team to put a $700 million loss on their sister company’s books because FTX was more open about its finances. He explained that FTX’s financial records were public, while Alameda’s were not as visible to investors.
Filed under: Bitcoin - @ October 7, 2023 6:20 am