Day 6 of Bankman-Fried's Trial: Wang Concludes Testimony, Ellison to Begin
Summary:
The 6th day of Sam Bankman-Fried's trial concluded Gary Wang’s testimony, former FTX CTO, and started Caroline Ellison's, ex-CEO Alameda Research. Wang confessed his involvement in illegal activities with Bankman-Fried and testified about his plea deal. Charges were pressed against Wang and Ellison for their part in the fraud leading to FTX's collapse, both pleaded guilty and are helping in the government’s investigation. Ellison's testimony to resume next. Wang stated having met government officials 18 times, and agreed that Bankman-Fried’s tweet saying "FTX is stable. Assets are secure," was true but deceptive, due to the difficulty in liquidating FTT tokens without crashing its price.
The court trial of Sam Bankman-Fried has proceeded into its sixth day, with a closure to ex-FTX CTO Gary Wang's declaration and the commencement of former Alameda Research CEO Caroline Ellison's testimony. Amongst other things, Wang spoke about his plea bargain. As reported by the Inner City Press on X (formerly Twitter), Assistant US Attorney Nicolas Roos questioned Wang, "In your initial encounter with the authorities, did you confess to participating in illegal activities with the accused?" Wang confirmed his admission.
"What was the directive given to you?" Roos pressed. Wang responded, "To be honest or forfeit a 5K letter, or face worse consequences." The term "5K letter" pertains to a proposal made by the government under Section 5K1.1 of the U.S. Sentencing Regulations, which act as the policy message on "substantial aid provided to authorities". It enables the government to apply "the correct reduction" to a sentence considering different types of assistance given.
The headline read, Caroline Ellison accuses Sam Bankman-Fried of misusing FTX client funds during trial. On Dec. 21, Damian Williams, the U.S. Attorney for the Southern District of New York, declared that charges were pressed against Wang and Ellison "due to their involvement in the scam that led to FTX's downfall". Both of them admitted guilty to the charges and were aiding the government’s probe. Roos highlighted that Wang accepted guilty to four counts, including conspiracy charges. When asked who he conspired with, Wang named Sam, former FTX engineering director Nishad Singh, and Caroline.
The court trial will resume with Ellison’s testimony at 2 pm.
Further reports on the trial revealed that Wang had 18 meetings with government officials. The preliminary two gatherings were with agents from the Justice Department, FBI, SEC, and Consumer Financial Protection Bureau where he confirmed that Bankman-Fried’s tweet on Nov. 7 proclaiming, "FTX is stable. Assets are secure," was correct. However, he later testified that, although true, the tweet was misleading. Wang explained that it wasn’t possible to liquidate the exchange's FTT tokens as a large-scale sale would significantly decrease the token's price. Prior to this, Bankman-Fried's defense lawyer had questioned Wang on his understanding of the difference between being solvent and liquid, to which he agreed to know. A magazine highlighted the risk of deposit: What do crypto exchanges actually do with your money?
Published At
10/10/2023 7:30:00 PM
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