On Thursday, the current trial of FTX co-founder Sam Bankman-Fried became a “friends’ arena” as Sam’s ostensibly buddies strangely testified against him.
Yedida was present in the courtroom and continued speaking about his participation as a developer in the crash of the FTX exchange even though the final day of the trial was adjourned with his testimony still unfinished. Yedida continued his testimony by saying that he created an automated system that delivers wire transactions from Alameda Research directly to the accounts of FTX consumers. Additionally, the transfers were noted in a database entry internally named “fiat@.”
A code error led Alameda’s liabilities to FTX to be exaggerated by $8 billion, according to SBF’s developer friend.
Following Yedida, Matt Huang, a co-founder of Paradigm, entered the witness stand and stated that the FTX exchange’s initial, yet quick growth, drew him to invest in the company. Huang was worried about the company’s lack of a clear governance structure, though. Through two funding rounds, Paradigm contributed $278 million to FTX. Huang said in court that “We have marked it to zero.” The VC also remembered hearing from SBF that Alameda was not given any special treatment when it came to FTX.
On the third day, Gary Wang, the second co-founder of FTX, showed up to testify against Sam, which was an unexpected but uninteresting surprise. According to Wang, Sam gave Alameda Research a unique favor that allows it to withdraw money even if the company has a negative balance. Wang said that the money would come from deposits made by FTX exchange customers.
Since the collapse of the exchange, Wang, a co-founder of FTX, has been silent and unknown and has provided hurried responses to questioning. He was instructed to calm down because he was speaking so quickly and freely. Wang was Sam’s co-founder in addition to being a close buddy. The two were even sharing a $35 million apartment with Yedida and other FTX top executive buddies.
In her testimony, Wang added that Alameda Research’s credit limit as a market maker on the FTX exchange was $65 billion, compared to other market makers’ credit lines of one or two million dollars.
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