FTX Co-Founder Gary Wang Says Execs Lied About Alameda’s Large Withdrawals

Gary Wang, a co-founder of the defunct FTX, has taken the stand to testify against Sam Bankman-Fried on his third day of trial. Wang claimed that he, along with Bankman-Fried, and other executives, knew and lied about large withdrawals from Alameda Research.

Gary Wang’s Testimony

As highlighted in a recent report, Wang’s testimony, delivered under oath as the fourth witness called by the U.S. Department of Justice in Bankman-Fried’s trial, has exposed a web of deceit and illicit activities within FTX and its associated entities. 

According to Wang, he, Bankman-Fried, Caroline Ellison, and Nishad Singh actively engaged in fraudulent activities, including granting special privileges to Bankman-Fried’s Alameda Research hedge fund that allowed it to withdraw unlimited funds from FTX.

Perhaps even more damning is Wang’s assertion that they knowingly lied about these activities, raising serious concerns about the ethics and transparency of FTX during their tenure. Wang, Ellison, and Singh pleaded guilty to charges shortly after Bankman-Fried’s arrest, further underscoring the severity of the allegations.

SBF Trial Day 3: Key Highlights

The third day of the trial also witnessed Matt Huang, co-founder of Paradigm, an investment firm specializing in cryptocurrencies, following Wang’s testimony. Huang disclosed that Paradigm had invested approximately $278 million across various funding rounds in FTX and FTX U.S. 

However, when questioned about the current valuation of Paradigm’s FTX equity holdings, he astonishingly replied, “We marked it to zero dollars.”

Earlier on Thursday, Adam Yedidia, a former ally of Bankman-Fried, took the stand with immunity, shedding light on the inner workings of FTX and the relationship dynamics within the organization.

Yedidia’s testimony challenges the defense’s portrayal of Bankman-Fried as merely a “math nerd” in over his head. He described Bankman-Fried as the CEO of FTX, responsible for overseeing all aspects of the business operations.

Besides declaring that Alameda Research has a bug in its codes that impacted liabilities valuations, Yedidia’s testimony also delved into the luxurious lifestyle enjoyed by the inner circle at FTX, including their opulent $35 million apartment in the Bahamas. Prosecutors pointed out that the rent for such a lavish property must have been substantial, raising questions about the financial stability and management of FTX. 

As Yedidia’s testimony continued, he revealed that he had not spoken to Bankman-Fried since November and had distanced himself from his longtime friend due to FTX’s financial woes and the unfolding legal proceedings.