FTX’s C-Suite has been, for the most part, cooperative with the authorities. Excluding Ryan Salame – who preferred not to say anything for the moment to avoid incrimination – and two other execs who left before the collapse and have not been accused of any wrongdoing, they’ve pleaded guilty and agreed to testify in court.
Following testimony from French commodities trader Marc-Antoine Juillard – who specifically stated he rejected margin trading in favor of spot trading to remain in control of his funds – and college acquaintance turned FTX colleague Adam Yedida, the third day of SBF’s trial saw testimony from Gary Wang, the first witness with master key access to FTX’s internal workings.
Self-Implication off the Bat
Following the pleasantries and several preliminary information, the court immediately threw hard-hitting accusations at the former CTO. Having pleaded guilty – presumably in exchange for a lighter sentence – Wang quickly acknowledged his guilt and that of his alleged co-conspirators.
SBF’s Lisner: So there not being an FTX board did not stop you from investing?
Judge Kaplan: Obviously… Come to the sidebar.
[The lawyers head up. This we cannot hear. Then, witness is done.[
Next witness: Gary Wang.
AUSA: What was your job at FTX?
Wang: CTO— Inner City Press (@innercitypress) October 5, 2023
On the stand, Gary Wang almost immediately confirmed that he had indeed committed crimes at FTX.
AUSA: “Did you commit crimes at FTX?”
Gary Wang: “Yes. With Nishad Singh, Caroline Ellison and Sam Bankman-Fried.”
AUSA: “Is that him over there?”
Gary Wang: “Yes.”
The U.S. Attorney then immediately addressed the question of wire fraud. Wang swiftly admitted its existence and stated that it took place by allowing Alameda to withdraw unlimited funds.
When pressed further, Wang indicated that these special privileges were baked into the code. He also indicated that – despite his 17% ownership stake in FTX – all disagreements were eventually solved in accordance with SBF’s wishes.
AUSA: Beyond buying and selling cryptocurrency, what could customers do on FTX?
Gary Wang: Futures, for example…
AUSA: How did FTX make money?
Gary Wang: Fees.
AUSA: Who were the customers?
Gary Wang: Institutions and retail customers.— Inner City Press (@innercitypress) October 5, 2023
Fees And Practices
Following Wang’s unequivocal admission of guilt, the court asked the former CTO how his firm generated revenue. Wang responded that revenue was generated through trading fees.
The name of the sister platform, Alameda Research, was also discussed. When pressed to answer, Wang indicated that the “Research part of the name” was chosen because SBF believed it would be easier to register a bank account with a name, implying that the firm was active in the R&D sphere.
“Sam said it would be easier to get a bank account. […] Don’t name it ‘Shit Coin Daytraders Inc.’ No one doesn’t like research.”
After several more questions, Gary Wang was allowed to step down from the witness stand – although he will likely be back for further questioning at a later date. The court adjourned soon after.
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