The DOJ Has Come Out Swinging in the Sam Bankman-Fried Trial

Hey, Gary Wang: What are we, chopped liver?

The FTX co-founder and former chief technology officer continued testifying in Sam Bankman-Fried’s trial Friday, sharing how the Alameda hedge fund was able to access an enormous credit line at the exchange with his former colleague’s blessing.

Prosecutors walked him through the events of the last few years (Alameda owed FTX over $100 million as far back as 2019!) but spent extra time on November 2022, putting a calendar up so the jury (and those of us watching from the back) could keep track of what happened when. FTX and Alameda were troubled for years, with Alameda borrowing billions from FTX over the course of the exchange’s lifetime and requiring an ever-increasing credit line from its sibling company, Wang said. The situation really escalated, however, after “some crypto news site” published a leaked balance sheet, he said.

“There was some balance sheet of Alameda that got leaked to some websites, and it was published on some crypto news site,” Wang said. (Ed. note: As far as I know, the sheet wasn’t leaked to “some websites” – CoinDesk reporter Ian Allison sourced it through the course of being a professional journalist, helping us win three awards.)

You’re reading The SBF Trial, a CoinDesk newsletter bringing you daily insights from inside the courtroom where Sam Bankman-Fried will try to stay out of prison. Want to receive it directly? Sign up here.

The trial has started off strong for the Department of Justice. Some expected the DOJ to bring its most important witnesses – namely Sam Bankman-Fried’s former inner circle – toward the end of the trial – but oh how wrong we were. After a brief testimony from a French trader who fell victim to FTX, we heard from a former software developer and close friend of Bankman-Fried – Adam Yedidia – on Wednesday and the majority of Thursday.

In one sense, Yedidia was a prosecutor’s dream witness. The former math and engineering major from MIT seemed genuine and at times slightly worried that he might say the wrong thing. His answers were clearly well-rehearsed, if not always accessible to the layperson. At one point, Judge Kaplan had to ask follow-up questions to his answer just to make sure he understood what Yedidia said, and it wasn’t because the subject itself…