Confessional FTX Co-Founder Speaks: “We Had Unlimited Withdrawal Rights”

FTXAn important name took the witness stand in the case filed after the bankruptcy of . Gary Wang, co-founder and CTO of FTX on FTX He explained their irregularities one by one.

Gary Wang agreed to cooperate with the prosecution and benefit from the effective repentance law in December 2022.

Taking the witness stand against SBF, Wang admitted the fraud charges and said his accomplices were SBF, Nishad Singh and Caroline Ellison.

Some participants who watched the hearing live stated that the SBF was quite tense and angry when Wang took the stand.

Wang stated that they were offered very special privileges by their former company, Alameda Research, and that these privileges were supported by FTX customer funds.

“We were given very special privileges from Alameda, where we founded FTX before launching it. These privileges included large credit limits, unlimited withdrawals and the ability to have a negative balance. These unlimited funds came from your FTX client. Added a special code for customer transactions that transfers money to Alameda. I was responsible for writing and checking this code. Even though SBF didn’t write this code, he was telling us and other developers what to do. Even though there were sometimes disagreements between us, Sam had the final say.

A $65 billion line of credit was opened after SBF opened customer funds to Alameda. No other customer had loans over $1 billion. A few hundred customers had million-dollar credit lines in the single and double digits. “When FTX filed for bankruptcy in mid-November 2022, Alameda had a negative balance of $8 billion.”

Stating that he withdrew between 200-300 million dollars from Alameda, Wang said that this money never came to his personal accounts and went to FTX’s investments in other companies.

Wang, who received a monthly salary of $200,000 from FTX, also owned 17% of the company’s shares.

Stating that they paid special attention to the name issue when they founded Alameda Research, Wang stated that they did not use a name that would evoke crypto, and that they aimed to collect money more easily from creditors and investors in this way.

While Wang was saying these, prosecutors showed an image of a social media post made by SBF about Alameda. During the days when SBF set up a backdoor for Alameda, it lied on social media that Alameda was no different from other customers and did not have a privilege.

Alameda is a liquidity provider on FTX but their account is just like everyone else’s. Alameda’s incentive is just for FTX to do as well as possible; by far the dominant factor is helping to make the trading experience as good as possible.

— SBF (@SBF_FTX) July 31, 2019