Gary Wang – who’s beforehand pleaded responsible to related prices to what Bankman-Fried faces – testified that Bankman-Fried directed him to put in writing code permitting Alameda Analysis to have a detrimental stability on FTX way back to July 2019.
Finally Alameda took and spent at the very least $8 billion of FTX clients’ cash, Wang mentioned.
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 mentioned.
For some time, FTX executives didn’t truly know the way a lot Alameda owed its clients due to a software program bug, Adam Yedidia mentioned. 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 mentioned. Wang later confirmed that Alameda had returned lenders’ funds and that these funds “got here from FTX clients.”
FTX offered itself as a secure custodian to buyers like Paradigm, Matt Huang mentioned.
Equally, Bankman-Fried instructed Paradigm that Alameda had no preferential remedy, Huang mentioned. Wang later mentioned Alameda did obtain particular remedy (see level 1).
At no level did Bankman-Fried or anybody at FTX inform Paradigm that Alameda was exempt from its auto-liquidation function, Huang mentioned.
Paradigm has marked its $278 million funding in FTX to zero, Huang mentioned.