Gary Wang, a key witness for prosecutors in the trial of his
former partner, Sam Bankman-Fried (SBF), revealed that he and SBF committed
multiple financial crimes related to their oversight of the now-bankrupt crypto
exchange, FTX. This admission, according to a report by CNN, comes as a
significant twist in the legal battle, shedding light on a massive, years-long
scheme to deceive customers and defraud investors.
Prosecutors claim that FTX directed customers’ funds
straight into a bank account controlled by Alameda, which was not related to
FTX except for a common founder. This action, they argue, misled customers
about where their money was and how it was being used, creating a web of
deception. Unlike regular FTX’s customers, Alameda enjoyed the privilege of
running a negative balance and making “unlimited withdrawals” from
FTX accounts.
Furthermore, prosecutors stated that Alameda had access to a
line of credit of up to $65 billion to use as collateral when making bets. This
sum greatly exceeded the credit provided by FTX to other major investors,
raising questions about preferential treatment. When asked whether these
advantages were openly shared with customers or investors, Wang said it was
not. Additionally, Wang revealed that he personally wrote computer code for
specific features under SBF’s guidance.
Initially, the special privileges extended to Alameda Research were intended to be…
