On the third day of Sam Bankman-Fried’s trial, two crucial witnesses took the stand in the case against the former CEO of FTX. The trial, expected to last for six weeks, is examining seven charges of fraud and deception related to the collapse of the cryptocurrency exchange.
Adam Yetitia: Former Employee
Adam Yetitia, a former colleague and friend of Sam Bankman-Fried from the Massachusetts Institute of Technology, worked for both Alameda Research and FTX. Yetitia revealed significant information about FTX’s financial operations.
According to Yetitia, FTX used Alameda Research’s bank account to receive deposits from users, but their computer program recorded the debt incorrectly, causing it to rise to $8 billion. However, Adam Yetitia only became aware of this discrepancy six months later, and Sam Bankman-Fried even admitted that it would take “6 months to 3 years” to rectify the situation.
Remarkably, only a few top-level FTX executives were aware of this loophole, including Sam Bankman-Fried, Caroline Ellison, Gary Wang, and Nishad Singh. Adam Yetitia asserted that FTX had deceived its customers.
Mr. Matt Huang: Paradigm Founder
Mr. Matt Huang, founder and manager of Paradigm, a leading cryptocurrency investment fund, was the next witness. Paradigm invested a significant amount of money in FTX prior to the exchange’s collapse.
Huang alleged that they were unaware that FTX had misused customer deposits, and if they had known this, they would have declined to invest. Huang marked Paradigm’s investment in FTX as worth zero, emphasizing that user funds should not be misused.
Gary Wang: Co-Founder of Alameda Research
Lastly, Gary Wang, former Chief Technology Officer of FTX and co-founder of Alameda Research, was the final witness. Wang admitted that they had allowed Alameda to withdraw an unlimited amount of money and clarified that Sam Bankman-Fried, along with several other high-level managers, had engaged in criminal behavior.
Wang revealed the process of founding Alameda Research and the development of FTX. He emphasized that all significant decisions were made through Sam Bankman-Fried and the early days of FTX were highly valued.
This trial is shedding light on many aspects of FTX’s operations and the future of Sam Bankman-Fried. Further questioning and the court’s analysis will shape the course of this case in the coming weeks.
The next trial session is scheduled for October 6th.