- FTX co-founder Gary Wang’s court testimony revealed wire fraud allegations against Sam Bankman-Fried and associates.
- Alameda Research’s extraordinary privileges and massive withdrawals from FTX detailed.
FTX [FTT] co-founder Gary Wang’s court testimony unveiled significant allegations of wire fraud against Sam Bankman-Fried and his inner circle.
Realistic or not, here’s FTT’s market cap in BTC’s terms
Wang spills the beans
During his court appearance, Wang made a startling revelation, stating that they had authorized Alameda Research, the trading desk founded by Bankman-Fried, to have unrestricted access to customer deposits held by FTX, the crypto exchange, as well as its sister company.
Gary Wang, a co-founder of FTX, found himself in a situation where he had to plead guilty and collaborate with authorities in their investigation of the exchange.
Despite being a long-time friend of Sam Bankman-Fried since high school and playing a significant role in establishing FTX, he maintained a much lower public profile compared to Bankman-Fried during the company’s rapid ascent in the crypto industry.
Wang provided intricate details about the arrangement with Alameda Research, clarifying that the trading desk enjoyed substantial privileges. This included a sizeable line of credit that facilitated quicker order execution on FTX’s platform.
Alameda also had the remarkable privilege of withdrawing funds without limitations. In fact, Alameda was even allowed to maintain a negative balance.
By the time FTX faced its eventual downfall, Alameda had withdrawn a staggering $8 billion from the platform and had utilized $65 billion from its line of credit, according to Wang’s revelations.
This level of indebtedness by Alameda set it apart from other market makers of FTX. Typically, these market makers operated with lines of credit in the millions, not billions, as was the case with Alameda.
The bottom line
In addition to the revelations about Alameda, Wang also disclosed significant information regarding his compensation and ownership within FTX. He shared that he had received an annual salary of $200,000 and held a substantial 17% equity stake in the company.
In stark contrast, Sam Bankman-Fried was the predominant owner of FTX, holding approximately 65% of the company. Meanwhile, in the case of Alameda Research, Bankman-Fried possessed an astounding 90% ownership, leaving Wang with a minority 10%.
Furthermore, during his tenure at FTX, Wang was granted various privileges, such as the ability to withdraw $200,000 from the company for the construction of his personal residence.
Additionally, he was given access to a significant sum of up to $300 million for investment in other startup companies.
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State of FTT
Notably, despite the ongoing legal turmoil enveloping FTX, its native token (FTT) demonstrated resilience and continued to exhibit growth over the past month.
At the time of the latest report, FTT was trading at $1.206. However, it’s essential to highlight that the network growth of FTT experienced a notable decline, suggesting a reduced interest from new addresses.
Source: Santiment