The trial of SBF continued on October 5, as multiple witnesses, including SBF's former friends and business partners, testified. Gary Wang, co-founder of FTX who has pleaded guilty, admitted that SBF committed financial crimes alongside several former FTX executives.
Wang said, "We gave special privileges to Alameda Research to allow it to withdraw unlimited funds from FTX and lied about it." Even if Alameda Research's account had a negative balance, it could still withdraw FTX customers' deposits. In addition, the FTX sister company had a line of credit that was "essentially without any limit", and could place orders slightly faster than other market makers.
Adam Yedidia, a former senior developer at FTX who used to be SBF's housemate, testified that SBF knew about FTX's liability problems almost a half year prior to the collapse. According to Yedidia, some FTX customers deposited fiat for their exchange account by wiring money to an Alameda-owned bank account, which made it harder for FTX to track debts. Last year in June, a bug in FTX's software code made the accounting incorrectly show that Alameda Research owed FTX customers $16 billion, while the actual liability was $8.7 billion. After fixing the bug, Yedidia expressed his concerns to SBF, who replied, "We were bulletproof last year, but we’re not bulletproof this year."
In addition, Matt Huang, co-founder of FTX's investor Paradigm, testified that SBF once told him Alameda Research had no preferential treatment on the FTX exchange. Paradigm's investment in FTX has been marked to zero.
To learn more, please read: the Trial of SBF
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