Shocking Statement for FTX: Figures Were Manipulated!

A shocking development took place in the trial of Sam Bankman-Fried (SBF), the founder of the FTX exchange. Co-founder Gary Wang took the podium. He then shared surprising claims about the accuracy of FTX’s insurance fund figures. The disclosures point to FTX’s movements during major liquidation events. It suggests that the exchange may have used secret Python code to manipulate the value of the insurance fund, a fund to protect user losses. Here are the details…

Manipulating FTX insurance fund with Python code

Gary Wang’s statement on October 6 shocked the courtroom. He claimed that FTX’s $100 million insurance fund in 2021, a crucial fund to protect users in turbulent market conditions, was not what it seemed. Contrary to public claims, the fund did not contain any FTX tokens (FTT) as stated. Wang instead claimed that the displayed figure was determined by multiplying the FTX Token’s daily trading volume by a random number close to 7,500. This disclosure challenges the transparency and integrity of FTX’s operations.

Evidence was presented during the trial, including the code allegedly used to create the size of the so-called “Backstop Fund,” or public insurance fund. This code appears to confirm Wang’s claims that the fund’s value was not accurately represented. FTX has frequently touted the value of its insurance fund on its website and through social media channels. Users relied on this information to gauge the safety and security of the platform. But the fund was often insufficient to absorb significant losses, Wang said. It also put users at risk.

A trader benefited from the mistake

Wang also said that in 2021, a trader took advantage of a bug in FTX’s margin system. He explained that this caused huge losses in the stock market, totaling hundreds of millions of dollars. When SBF realized its insurance fund had been depleted, Wang claimed that it instructed Alameda Research to cover the loss, presumably to conceal the loss because Alameda’s financial details were more private than FTX’s. In another shocking revelation, Wang claimed that SBF encouraged him and Nishad Singh to implement an “allow_negative” balance feature in FTX’s code. This feature reportedly allows Alameda Research to trade on the exchange with virtually unlimited liquidity.

This Week Is Critical For This Altcoin: It May See Harsh Movements!

This information revealed during the hearing calls into question the integrity of FTX’s activities. It also raises important legal questions about possible harm to users. Wang reportedly admitted to commodities fraud along with SBF and other key figures. Also critical was Wang’s admission that he had committed securities fraud. Because this further increases the legal difficulties faced by FTX. As this high-stakes trial progresses, the crypto community is closely monitoring further disclosures.

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