SBF Under Scrutiny as FTX Co-Founder Testifies

Says He and SBF created a backdoor for Alameda Research to get Unlimited Funds; Pleads Guilty.

NEW YORK, Friday, October 7: Gary Wang, a co-founder of the cryptocurrency exchange FTX on October 6, 2023, pleaded guilty to fraud and testified against Sam Bankman-Fried in the ongoing trial against crashed FTX.

Wang testified that he and Bankman-Fried created a backdoor in FTX’s code that allowed Alameda Research, a company controlled by Bankman-Fried, to withdraw unlimited funds from FTX customer accounts.

Wang also testified that he and Bankman-Fried lied to investors about the financial health of FTX and Alameda.
Bankman-Fried faces allegations of misappropriating billions of dollars in customer funds and providing false information to investors regarding FTX’s financial stability. He maintains his plea of not guilty to all the accusations.

Wang’s testimony is a significant blow to Bankman-Fried’s defense. Wang is a credible witness, as he co-founded FTX and had intimate knowledge of the company’s operations.
On September 22, the court denied Sam Bankman-Fried’s bail request, ruling that he was a flight risk¹

Wang’s testimony damages Bankman-Fried’s case, as it corroborates many of the allegations made by the prosecution. However, Bankman-Fried’s defense team will likely argue that Wang is not a credible witness, as he has pleaded guilty to fraud and is facing a prison sentence.

Sources