On the third day of the SBF lawsuit, FTX co-founder Gary Wang, Paradigm partner Matt Huang and FTX engineer Adam Yedidia all testified in court today.
Co-Founder Gary Wang
Gary Wang stated in court that he, SBF, former Alameda Research CEO Caroline Ellison, and former FTX executive Nishad Singh committed illegal acts such as wire transfer fraud, securities fraud, and commodity fraud (except for SBF, the other three have pleaded guilty) . Gary Wang admitted in court yesterday that FTX gave Alameda Research special permissions to place orders faster than other market makers, and also allowed it to withdraw unlimited funds from FTX (withdrawals can also be made even if the balance is negative) , and openly lied about this fact.
When Gary Wang answered the prosecutor's questions, SBF did not lower his head to use the computer as usual, but paid close attention to Gary Wang's speech. And his father, Joseph Bankman, was also taking careful notes.
Matt Huang, Partner at Paradigm
Gary Wang was followed immediately by Matt Huang, a former Paradigm partner at FTX, who told the court that Paradigm invested approximately $278 million in various rounds of FTX and FTX U.S. He was excited about FTX’s rapid early market share growth, but he was also concerned about FTX’s lack of a formal governance structure. In addition, Matt Huang also recalled that SBF told him that Alameda Research did not have privileges on the FTX exchange. When asked how Paradigm currently values its FTX stake, Matt Huang said:
"We have written it down to zero."
Former roommate Adam Yedidia
Adam Yedidia, a former FTX engineer and former roommate of SBF, interned for a short period of time at sister company Alameda Research before joining FTX in January 2021. He confirmed that his salary is very high, with a basic annual salary of nearly US$200,000 and bonuses of several billion. One million U.S. dollars.
Adam Yedidia provided details in court about the automated system he developed "fiat@ftx.com", which is mainly used to track user deposits into FTX, and these deposits are actually held by Alameda Research and exist In a bank account called North Dimension (a subsidiary of Alameda), this design made it more difficult to calculate the user's balance.
Prosecutors highlighted a conversation Adam Yedidia had with SBF on a tennis court. Adam Yedidia said he discovered and fixed an accounting error in mid-June that indicated Alameda owed FTX customers $16 billion. But when he corrected the problem, he noticed Alameda still had $8 billion in outstanding debt, which worried him greatly.
"Last year we were fearless, but this year we are no longer invulnerable," he recalled the SBF telling him, adding that the SBF had revealed it hoped to raise more cash from Saudi Arabia or the United Arab Emirates.
Adam Yedidia told the jury that he discovered Alameda was using FTX customer deposits to pay off its debts to creditors, and when asked about his actions after the discovery, Yedidia responded: "I quit my job."
This article FTX co-founder and engineer testified in court: Admitting to opening a backdoor for Alameda and misappropriating customer deposits to repay debts first appeared on Zombit.
