FTX Co-Founder Testifies Against Sam Bankman-Fried, Accusing Them of Financial Crimes and Deception

by Gabriel Martinez
FTX Trial

During a pivotal moment in the trial, the co-founder of FTX, Gary Wang, delivered damning testimony against his former business partner, Sam Bankman-Fried. Before a New York jury, Wang revealed that he and Bankman-Fried had engaged in financial misconduct and had deceived the public in the lead-up to the cryptocurrency trading platform’s collapse in the previous year.

Wang, at the age of 30, acknowledged his involvement in wire fraud, securities fraud, and commodities fraud during his tenure as the Chief Technical Officer at FTX. He also disclosed that he held ownership in Alameda Research, a cryptocurrency hedge fund founded by him and Bankman-Fried in 2017. Importantly, this fund was used to illicitly withdraw a staggering $8 billion from FTX funds. According to Wang, these illegal actions were directed by Bankman-Fried.

This revelation came on the second day of what promises to be a protracted six-week trial. Prosecutors are aiming to substantiate their claim that Bankman-Fried misappropriated billions of dollars from investors and customers. This alleged misconduct was supposedly driven by a desire to acquire luxury beachfront properties, amass personal wealth, and make substantial political contributions exceeding $100 million, all with the intent of influencing cryptocurrency regulation.

It’s worth noting that Bankman-Fried, aged 31, has been in custody since August and was extradited from the Bahamas to face charges in Manhattan federal court. Throughout the proceedings, he has consistently pleaded not guilty.

Prior to the trial’s commencement, prosecutors pledged to rely on testimonies from individuals within Bankman-Fried’s inner circle to establish that he intentionally defrauded investors and clients, and subsequently covered up his actions. In contrast, the defense contends that Bankman-Fried’s actions were driven by a genuine attempt to salvage his businesses in the aftermath of the cryptocurrency market’s collapse.

In a brief half-hour of testimony, Wang admitted to allowing Alameda Research unrestricted access to withdraw funds from FTX while also deceiving the public about it. Furthermore, he disclosed that Alameda Research was not only permitted to maintain negative balances and unlimited open positions but also that its underlying code allowed for a staggering line of credit amounting to $65 billion. This figure prompted a brief inquiry from Judge Lewis A. Kaplan to ensure the distinction between billions and millions.

Wang revealed that Bankman-Fried was the mastermind behind these unique code features. He had first met Bankman-Fried over a decade ago during a high school summer camp, shortly after moving to the United States from China and growing up in Minnesota.

The financial largesse at Alameda was such that Wang, despite his relatively young age, was able to borrow a million dollars for a home purchase and secure between $200 million and $300 million for investment purposes. Wang’s financial situation was significantly bolstered by his ownership stakes of 10% in Alameda and 17% in FTX, assets that would have made him a billionaire had the businesses not collapsed.

Gary Wang is the first of three former high-ranking executives who will testify against Sam Bankman-Fried. These individuals have pleaded guilty to fraud charges in exchange for potential leniency during sentencing. The other two are Carolyn Ellison, Alameda Research’s former CEO and a former romantic partner of Bankman-Fried, and Nishad Singh, the former Engineering Director at FTX.

Earlier in the proceedings, Adam Yedidia, a former software developer for FTX, testified that he had left the company in November after discovering that Alameda had used investor funds to repay creditors. He recalled living with Bankman-Fried and other top executives, where he expressed concerns about Alameda’s significant debt owed to FTX. Bankman-Fried, seemingly nervous, replied that becoming financially secure could take anywhere from three months to three years.

Frequently Asked Questions (FAQs) about FTX Trial

What are the key allegations in the FTX trial against Sam Bankman-Fried?

In the FTX trial, Sam Bankman-Fried is accused of committing financial crimes, including wire fraud, securities fraud, and commodities fraud. His co-founder, Gary Wang, testified that they engaged in these activities, leading to the collapse of the cryptocurrency trading platform.

What is the significance of Gary Wang’s testimony?

Gary Wang’s testimony is significant as he admitted to his own involvement in financial misconduct and implicated Sam Bankman-Fried in directing illegal actions. This testimony is central to the prosecution’s case against Bankman-Fried.

What are the specific charges against Sam Bankman-Fried?

Sam Bankman-Fried faces charges related to misappropriating billions of dollars from investors and customers, using these funds for personal gain, including acquiring luxury real estate and making substantial political contributions aimed at influencing cryptocurrency regulation.

How did Sam Bankman-Fried defend himself against these allegations?

Bankman-Fried has consistently pleaded not guilty and argued that his actions were not driven by criminal intent but rather an attempt to save his businesses after the cryptocurrency market’s collapse.

Who are the other individuals expected to testify against Sam Bankman-Fried?

In addition to Gary Wang, two other former top executives, Carolyn Ellison and Nishad Singh, are slated to testify against Bankman-Fried. They have pleaded guilty to fraud charges in cooperation deals that may result in leniency during sentencing.

What role did Adam Yedidia play in the trial?

Adam Yedidia, a former software developer for FTX, testified that he left the company after discovering that Alameda Research had used investor funds to repay creditors. His testimony sheds light on the financial practices within the company.

More about FTX Trial

You may also like


EconGuru123 October 6, 2023 - 6:16 am

those charges, whoa! billions, luxury real estate, political $$$??

CryptoExpert23 October 6, 2023 - 7:31 am

dang, Sam Bankman-Fried in deep trouble! gary wang spillin’ the beans on him

TechSavvyGirl October 6, 2023 - 11:09 am

Adam Yedidia leavin’ FTX ’cause of shady money moves, somethin’ fishy goin’ on

InsiderInfoMan October 6, 2023 - 7:01 pm

them execs cooperatin’, snitchin’ for leniency, messy situation

FinanceWhiz October 6, 2023 - 11:19 pm

so, Bankman-Fried say he no did anythin’ wrong, just savin’ his biz


Leave a Comment


BNB – Big Big News is a news portal that offers the latest news from around the world. BNB – Big Big News focuses on providing readers with the most up-to-date information from the U.S. and abroad, covering a wide range of topics, including politics, sports, entertainment, business, health, and more.

Editors' Picks

Latest News

© 2023 BBN – Big Big News