On day four of the criminal trial of former FTX CEO Sam Bankman-Fried, Gary Wang, who co-founded the now-bankrupt crypto exchange and served as its former chief technology officer (CTO), testified. During his testimony, the former FTX executive revealed details about the connection between the cryptocurrency exchange and Alameda Research.
FTX’s Sam Bankman-Fried Allegedly Gave Alameda Research ‘Special Privileges’
According to various reports, on Friday, October 6, Wang appeared again in court and testified that Alameda Research’s account on FTX was allowed to trade more funds than it had available. The former FTX CTO reportedly said that Sam Bankman-Fried authorized the integration of a “allow negative” feature, which afforded Alameda “special privileges” on FTX.
Wang reportedly revealed that the “allow negative” feature enabled Alameda to hold a negative balance more than FTX’s revenue at some point in 2020 ($200 million against $150 million). According to reports, Wang claimed that he increased Alameda’s line of credit several times and up to $65 billion under Bankman-Fried’s instructions.
When the government’s prosecutors questioned where the money came from, Wang reportedly affirmed that it came from FTX’s customers’ funds. Based on the co-founder’s testimony, Bankman-Fried claimed that the “allow negative” feature was all about FTT, a native cryptocurrency “created to act as equity in FTX.”
Wang reportedly acknowledged that the customers never authorized their funds to be used by Alameda Research. “The customers did not give us permission to use their accounts like this,” the former FTX chief technology officer allegedly said.
Did SBF Repeatedly Lie About Connections With Alameda?
During his testimony, Wang was asked whether he remembered Bankman-Fried making public statements about Alameda’s unusual connections with the FTX exchange. “Yes, he (SBF) said they (Alameda Research) were treated equally and didn’t use FTX funds,” the FTX cofounder allegedly affirmed.
Furthermore, the prosecutors showed Wang – and the court – a 2019 tweet from SBF claiming that Alameda was not using funds from FTX. Interestingly, Wang affirmed that Bankman-Fried ordered the addition of “allow negative” in the exchange’s codebase on the same day the tweet was made.
It appears that is not the only time Bankman-Fried lied about Alameda’s activities on the FTX exchange. The…
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