FTX use A Hidden Python Code to Fake its Insurance Fund Figure – Gary Wang
Gary Wang, a co-founder of FTX, testified that the cryptocurrency exchange utilized secret Python code to artificially increase the value of their insurance funds, a pot of money meant to shield consumers from losses during big liquidation events.
On October 6, Gary Wang, the previous chief technology officer of FTX provided new testimony. He asserted that the purported $100 million in insurance payments for 20221 from FTX were fraudulent and never included any of the purported exchanges of ETX’s tokens (FTT), as promised.
Instead of being determined by multiplying the FTX’s daily trading volume, the value displayed to the public is a random number that is close to 7,500. Wang responded with a single word, “No,” when the prosecutors brought up the tweet along with other obvious stains on its worth.
The purported formula for calculating the size of the “Backstop Fund,” or public insurance fund, is on display as an exhibit during the trial on October 6. The significance of FTX’s insurance fund, whose purpose it is to safeguard users from losses in the event of massive, irrational market activity, is frequently commended on the company’s website and social media pages.
According to Wang’s evidence, the funds frequently didn’t have enough money to pay these losses. When Bankman-Fried noticed the insurance fund was about to run out, Wang claims he was told to have Alameda “take on” the loss. This was purportedly an attempt to cover up the deficit given that Alameda’s balance sheets were more private than FTX’s.
In addition to disclosing the allegedly fraudulent nature of FTX’s insurance fund, Wang claimed that Bankman-Fried compelled him and Nishad Singh to add a “allow_negative” balance feature to the FTX code, allowing Alameda Research to trade on the cryptocurrency exchange with almost limitless liquidity.
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