On the third day of the trial, the courtroom witnessed the appearance of a crucial witness, Mr. Gary Wang, the former Chief Technology Officer of FTX. During the fourth trial session, Mr. Wang disclosed shocking information about his journey and the unique relationship between Sam Bankman-Fried and Alameda Research.
Gary Wang, one of the high-ranking and trusted managers of Sam Bankman-Fried, took the stand to testify against the person he once co-founded with. This has created a trial full of gravity and tension as secret details and special privileges of Alameda on FTX began to be exposed.
One of the notable points is Alameda’s possession of “special privileges” that Sam Bankman-Fried had kept secret. This includes the ability for Alameda to have “allow negative,” allowing trading even when the account has a negative balance. This enabled Alameda to employ a range of tactics to optimize profits, including making the market for FTX’s token, FTT, and trading even when the account was in the red.
Additionally, Alameda was given priority in order execution on FTX, and the intentional slowdown of user transactions through the computer browser provided by FTX was a deliberate strategy to give Alameda an advantage.
Another part of the trial revealed that Alameda had taken advantage of the ability to withdraw funds from FTX users to withdraw billions of dollars of their assets from the exchange without notifying them.
Gary Wang also disclosed that Sam Bankman-Fried had considered closing down Alameda Research and transitioning to another fund called Modulo Capital, but this did not materialize because Alameda could not repay the large amount borrowed from FTX’s business partners and customers.
All these details have highlighted a murky picture of the internal operations of FTX and Alameda Research. The upcoming trial promises to reveal even more crucial and complex information about the relationship between Sam Bankman-Fried and Alameda Research, as well as the activities of the cryptocurrency exchange FTX.