FTX Customer Balances Are Equal to Hot Wallet Assets, but There Is an Additional $8 Billion in Liabilities
Gary Wang, co-founder of FTX, testified in the SBF trial that in November 2022, FTX's customer balance was equal to the assets held in the hot wallet, with one important exception: a hidden debt of $8 billion called "fiat@". As customers began withdrawing assets from FTX in November 2022, SBF asked Gary Wang to calculate how much money Alameda Research needed to deposit into the exchange to cover the outflow of funds.
Gary Wang: The Insurance Fund Balance Announced by FTX Is Generated by a Random Number Generator
On October 7th, according to BitMEX Research citing testimony from FTX co-founder Gary Wang, Wang stated that the insurance fund balance disclosed by FTX was generated by a random number generator and does not include FTT. Instead, it is just a number in US dollars. The numbers listed do not match those in the database and are actually calculated separately, with the real numbers being lower than the fake ones.
As Early as 2019, Alameda’s Function of Stealing Customer Funds Had Been Implanted Into FTX’s Computer System
FTX co-founder Gary Wang revealed more details about the corrupt relationship between Alameda Research and its exchange during the trial of Sam Bankman-Fried on Friday.
Wang testified that the functionality required for Alameda to steal client funds had been implanted in FTX's computer system as early as 2019.
In addition, compared to other clients, Alameda received three privileges at FTX. One of them allowed Alameda to trade with more funds than it actually had in its account.
SBF trial witness: FTX accounting software glitch overstated Alameda's $8 billion debt
A witness in the SBF trial stated that an unusual way in which FTX handles customer deposits led to a software error that exaggerated the amount Alameda owes the trading platform's customers by $8 billion.
One key aspect is the banking industry, former FTX developer Adam Yedidia told the court that in FTX's early days, its customers transferred money to Alameda instead of directly depositing fiat currency into FTX. This unusual relationship made it difficult for the company to track customer debt. Yedidia said that there was an error in the accounting software, which showed that Alameda owed far more money than the actual amount by June 2022.
Former FTX Developer Testifies About $8 Billion Deficit in Sam Bankman-Fried Trial
Adam Yedidia, former roommate of Sam Bankman-Fried and FTX developer, testified in court about the $8 billion deficit reported by the crypto exchange prior to its bankruptcy. Yedidia spoke about the connection between FTX and Alameda Research, revealing a bug in FTX's code that resulted in the error. Yedidia also claimed that Bankman-Fried asked him to discuss the matter via the messaging app Signal, which had an auto-delete feature to avoid regulatory scrutiny. Bankman-Fried's trial is ongoing, with Gary Wang and other former FTX employees expected to testify.
FTX Hacker Drains 80 Bitcoin Wallets in Recent Bridging Transaction Conversion of ETH to BTC
CertiK has detected new activity related to the FTX drainer, with a significant conversion of 5,624 ETH to BTC through a bridging transaction. This follows previous alerts indicating the hacker responsible for stealing millions from FTX was back in action, potentially bridging up to 30,000 ETH to BTC. CertiK's monitoring tool had previously identified the hacker's conversion of approximately 15,000 ETH to BTC on September 30, with the last noted transaction before this activity in November 2022.
London-Based Cocoa Broker Testifies About His Bitcoin Holdings in FTX Trial, As High-Profile Witnesses Lineup
London-based cocoa broker Marc-Antoine Julliard testified in the criminal trial of former FTX CEO Sam Bankman-Fried, revealing his Bitcoin holdings on the embattled crypto exchange. Julliard's portfolio included Dogecoin, but the focus of his testimony was on the 4 Bitcoins, valued at roughly $80,000, which he claimed were stuck in FTX's vaults.
Tom Brady's Role in High-Stakes Crypto Trial of Sam Bankman-Fried
Tom Brady was mentioned during the opening statements of the criminal trial of former crypto king Sam Bankman-Fried, as his attorney argued that Bankman-Fried's brief entry into high society is not evidence of illicit activity. Bankman-Fried and his company FTX's lucrative advertising deals with Brady and other celebrities were deemed "not a crime" by the defense attorney. Bankman-Fried is being tried for seven criminal counts, including committing fraud against depositors at the FTX cryptocurrency exchange. FTX paid Brady $55 million for 20 hours of promotional work per year for three years.
FTX Founder Sam Bankman-Fried Defends Against Charges of Stealing Customer Money in Court Trial
At his fraud trial, Sam Bankman-Fried's lawyer argued that he did not steal customer money from FTX but rather overlooked risk management while building the business. The defense acknowledged that FTX lent money to Bankman-Fried's hedge fund, Alameda Research, but argued that he believed the loans were permitted and backed up by collateral.
Jump Trading Loses Nearly $300 Million in FTX Collapse, Tai Mo Shan Limited Mentioned as Former Robinhood Market Maker
Jump Trading, including its related entity Tai Mo Shan Limited, reportedly lost almost $300 million in the FTX collapse. Tai Mo Shan used to be one of Robinhood's largest market makers, responsible for fulfilling user cryptocurrency trades. Jump and Tai Mo Shan were deeply entangled with FTX and faced significant losses. Jump is currently facing a lawsuit alleging market manipulation, but the SEC has not accused the company of wrongdoing in relation to its cryptocurrency activities.
