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Sam Bankman-Fried Stole FTX Funds From The Very Start
- By The Financial District
- Oct 9, 2023
- 2 min read
Sam Bankman-Fried authorized the illegal use of FTX customers’ funds and assets to plug financial gaps at an affiliated hedge fund from the exchange’s earliest days, FTX’s co-founder Gary Wang told a New York jury, as prosecutors said Bankman-Fried was the mastermind behind one of the biggest frauds in US history, Ken Sweet and Larry Neumeister reported for the Associated Press (AP).
Prosecutors allege that Bankman-Fried, 31, stole billions of dollars from investors and customers in order to fund a lavish lifestyle in The Bahamas and buy the influence of politicians, celebrities, and the public. I Photo: FTX Português
Eventually, the losses at the hedge fund, Alameda Research, became so large that there was no way to hide them any longer, Wang said in his second day of testimony.
“FTX was not fine,” Wang said, referring to the now-infamous tweet that Bankman-Fried wrote only a few days before the exchange filed for bankruptcy in November 2022.
Prosecutors allege that Bankman-Fried, 31, stole billions of dollars from investors and customers in order to fund a lavish lifestyle in The Bahamas and buy the influence of politicians, celebrities, and the public.
Wang was FTX’s chief technology officer and is part of what has been referred to as the “inner circle” of FTX executives who have agreed to testify against Bankman-Fried in exchange for leniency in their own criminal cases.
Wang has pleaded guilty to wire fraud, securities, and commodities fraud as part of his agreement with prosecutors.
Prosecutors hope to have Caroline Ellison, the former CEO of Alameda and Bankman-Fried’s ex-girlfriend, take the stand Tuesday. Wang and Bankman-Fried started Alameda in 2017, then founded FTX in 2019.
Wang told the jury that, at the direction of Bankman-Fried, he inserted a code into FTX’s operations that would give Alameda Research the ability to make nearly unlimited withdrawals from FTX and have a line of credit up to $65 billion.
