FTX co-founder Gary Wang turns on friend and business partner Sam Bankman-Fried to admit they DID commit ‘wire fraud, commodities fraud and securities fraud’ at trial
- Gary Wang took the stand Thursday at Sam Bankman-Fried’s trial and admitted he and Bankman-Fried committed fraud
- Asked what type of crimes the pair committed as co-founders of FTX, Wang said: ‘Wire fraud, commodities fraud, securities fraud’
- Wang has already pleaded guilty to his part in the scheme, along with Caroline Ellison and Nishad Singh
The co-founder of FTX Thursday dramatically told a court that he committed fraud with Sam Bankman-Fried.
Gary Wang, who has pleaded guilty to his part in the scheme, agreed when prosecutors asked him if he ‘committed financial crimes’ while working at FTX, where he was chief technical officer.
Asked what type of crimes, Wang said: ‘Wire fraud, commodities fraud, securities fraud’.
Wang, who is one of the prosecution’ star witnesses, said he committed the crimes with Bankman-Fried, Caroline Ellison and Nishad Singh.
Ellison used to run Alameda Research, FTX’s sister company, and Singh was a top FTX engineer. Both have admitted their part in the scheme and are expected to testify at the trial.
Gary Wang took the stand Thursday at Sam Bankan-Fried’s trial and admitted he and Bankman-Fried committed fraud
FTX founder Sam Bankman-Fried is holed up in the Bahamas following his resignation as CEO on Friday
The jury has been sworn in and opening statements are underway in the fraud trial of embattled FTX founder Sam Bankman-Fried
Wang, 30, told the court he was born in China and had known Bankman-Fried since childhood when they went to summer camp together.
At MIT they were roommates, Wang told the court, but he has now turned against his former friend.
The court heard that Wang and Bankman-Fried owned both FTX and Alameda Research.
Explaining the fraud, Wang said: ‘We gave special privileges to Alameda Research which allowed it to withdraw unlimited amounts of funds from the platform (FTX) and lied about this to the public’.
Wang said that before FTX collapsed, Alameda had borrowed $8 billion from FTX, which was all FTX customers’ money.
Another advantage given to Alameda was a $65 billion credit line with FTX which Wang said was much larger than other big investors.
Earlier in the day the jury was shown photos of Bankman-Fried and two others in their apartment eating, with a large bottle of ketchup and a can of LaCroix in the foreground.
Despite their wealth, the FTX employees living there complained about the rent on the penthouse which appeared to be $15,000 each.
Those living at the property sent group messages with the group name ‘People of the House’.
In one of them, one person said that they could ‘probably swing paying $15k a month’ but said it ‘would be kind of rough’.
Wang, who is one of the prosecution’ star witnesses, said he committed the crimes with Bankman-Fried, Caroline Ellison and Nishad Singh. Both have admitted their part in the scheme and are expected to testify at the trial
Bankman-Fried, with Alameda Research chief executive Caroline Ellison, and FTX co-founder Gary Wang, to their left, at Bankman-Fried’s birthday in Hong Kong. The group dressed up in wigs resembling Bankman-Fried’s hairstyle
The 31-year-old was arrested at the exclusive 12,000sqft pas in the Bahamas where he lived with eight college friends after setting up the company’s headquarters there
Adam Yedidia, who worked as a software developer at FTX until November 2022, told the court that he quit when he found out that Alamada Research, FTX’s sister company, had been using FTX customers’ deposits to pay its creditors.
On Thursday he testified that he recalled that the ‘cost of the rent sounded very high’ and was ‘commensurate with an apartment that cost $35 million’.
It is unclear why FTX staff were paying rent when Bankman-Fried had bought the apartment.
At the end of the messages, Bankman-Fried wrote that he had been ‘assuming that’s basically just Alameda (Research, FTX’s sister company) paying for it in the end’.
Assistant US Attorney Danielle Sassoon asked Yedidia if Bankman-Fried ‘slept with any frequency on a bean bag?’
The detail was one that was often repeated in profiles of Bankman-Fried to show how he was an unconventional billionaire.
Yedidia said that it was ‘much rarer’ than when FTX was previously based in Hong Kong.
In the Bahamas he would take ‘occasional naps but not with much frequency’, he said.
Yedidia revealed that Bankman-Fried asked for his advice about Caroline Ellison, who was in charge of Alameda.
He said: ‘Some time in early 2019 the defendant told me that he and Caroline had sex and asked if it was a good idea for them to date. I said no.
‘He said that he thought I’d say something like that’.
Yedidia told the jury that Bankman-Fried told him that he was ‘more willing to take risks than many others’ and that taking risks was ‘reasonable’.
Adam Yedidia, who worked as a software developer at FTX until November 2022, told the court that he quit when he found out that Alamada Research, FTX’s sister company, had been using FTX customers’ deposits to pay its creditors.
Yedidia gave evidence under an immunity deal meaning he could not be prosecuted for anything he said. Yedidia said he was worried he may have ‘inadvertently’ written something into the code of FTX that was used in criminal activities.
He called Bankman-Fried a ‘close friend’ who he first met at MIT where they lived together.
The jury watched a video posted on the FTX website called ‘Get To Know Crypto’ which explained what cryptocurrency is and featured a cartoon version of Bankman-Fried.
It described FTX as a group of ‘visionaries’ and said FTX was a place where ‘investing and ethics can meet’.
The jury was shown the cover of Forbes magazine that Bankman-Fried appeared on and Yedidia said that the former FTX boss played a major role in marketing the company.
The jurors also saw the TV commercial for FTX featuring Tom Brady playing golf in which football legend says that FTX is the ‘best way to get in the game’.
Brady’s then-wife Gisele is also featured in the splashy advert.
The jury also saw the Super Bowl advert from FTX featuring Larry David, for which he was paid a reported $10 million.
In the commercial David jokingly tells an actor not to invest in crypto because he is right about everything.
After both had screened, Judge Lewis Kaplan asked Yedidia: ‘Who is Tom Brady?’
He replied that he was a football player.
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