Former FTX Developer's Testimony Sheds Light on $8Bn Shortfall in Bankman-Fried Trial
Summary:
The third day of the trial of former FTX CEO, Sam “SBF” Bankman-Fried, featured key testimony from Adam Yedidia, his ex-roommate and FTX developer, who shed light on an $8-billion shortfall in the crypto exchange before its bankruptcy. Yedidia revealed a bug in FTX’s code which reportedly ensured Alameda Research’s liabilities didn't decrease, leading to the $8 Bn error. He also highlighted a contentious connection between FTX and Alameda Research. The trial, expected to run through November, might witness other significant testimonies, especially from a line-up of previous FTX employees.
The third day of the court proceedings involving Sam “SBF” Bankman-Fried, formerly in charge at crypto exchange FTX, featured testimony from Adam Yedidia, Bankman-Fried's one-time MIT roommate and FTX colleague. Yedidia discussed the $8 billion shortfall the cryptocurrency platform had on the books prior to declaring bankruptcy. Coverage from Inner City Press reveals that Yedidia appeared on the witness stand on October 5th as part of the ongoing case at the United States District Court for the Southern District of New York. His testimony focused on the relationship between the crypto exchange and Alameda Research, a central element of Bankman-Fried’s purported fraud. Yedidia allegedly notified Bankman-Fried of an FTX code glitch that led to "no reduction in Alameda's liabilities," thereby causing an approximately $8 billion discrepancy. Yedidia conveyed to Assistant U.S. Attorney Danielle Sassoon that he quit FTX due to the discovery that "customer deposits were used by Alameda to settle its loans". He says Bankman-Fried directed him to discuss the code via the messaging application Signal only, adding that Bankman-Fried instructed everyone to do so, citing the self-deletion feature for messages to prevent potential issues with regulators.
Opposite to a “paddle tennis court” in The Bahamas, Yedidia went on to confront Bankman-Fried about the $8 billion disparity, and the ex-CEO provided assurances. Sassoon’s inquires also considered Yedidia's awareness of the intimate relationship between Bankman-Fried and former Alameda Research CEO Caroline Ellison. Ellison is likely to testify against Bankman-Fried as part of a plea deal made with the prosecuting attorneys. The presiding judge, Lewis Kaplan, nullified Bankman-Fried's bail in August after prosecution accused him of intimidating Ellison and other witnesses by disclosing portions of her personal journals to the press. Bankman-Fried's initial criminal trial, which is set to extend into November, began with jury selection on October 3rd. The anticipated line-up of witnesses for the prosecution includes Gary Wang, a co-founder of FTX, who is expected to take the stand following Yedidia. It is thought that the prosecution might also summon ex-FTX engineering director Nishad Singh and previous FTX COO, Constance Wang.
Published At
10/5/2023 3:57:08 PM
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