Gary Wang confirmed that Alameda Research, the trading firm associated with FTX, enjoyed what he referred to as “special privileges” from FTX. The prosecution presented evidence related to a code embedded in the FTX wallet page that allowed users to go above their account balance if the “allow negative” command was checked. This code essentially permitted Alameda to trade with more funds than it had in its account, providing it with a significant advantage in trading speed and volume. Importantly, this special privilege was never disclosed, and it contradicted SBF’s claims regarding loans to Alameda.

Withdrawal of Nearly $8 Billion

Wang’s testimony revealed that Alameda used these special privileges to withdraw nearly $8 billion in both fiat and cryptocurrencies. Shockingly, these funds were allegedly derived from FTX customers, effectively making Alameda the beneficiary of customers’ assets on the platform. The “allow negative” code had no limit on the amount Alameda could withdraw, and this practice reportedly began in July 2019, following the addition of the code by FTX’s Director of Engineering, Nishad Singh. Wang emphasized that no other entity besides Alameda enjoyed this exceptional privilege.

Massive Negative Balance

Wang also disclosed that Alameda Research had a negative balance in 2019, which was so substantial that it exceeded FTX’s revenue. At one point, Alameda’s negative balance amounted to “$200 million or more,” while FTX’s revenue was approximately $150 million. This revelation highlights the extent of Alameda’s financial implications on FTX’s operations.

$65 Billion Line of Credit to Alameda

In response to questions about the size of the line of credit authorized by SBF for Alameda, Wang stated that SBF had approved a staggering $65 billion for the trading firm. Remarkably, no other FTX customer received anywhere close to this amount in loans. Only a handful of customers received loans in the million-dollar range. This testimony contradicts the narrative that Alameda Research primarily served as a liquidity provider for FTX.

Public Statements and Social Media

The prosecution questioned Wang about public statements made by SBF regarding how Alameda Research was treated on the FTX platform. Wang confirmed that SBF consistently asserted that Alameda was treated like any other customer and did not use FTX funds. This assertion contradicts the evidence presented during the trial.

SBF’s 2019 Tweet

The prosecution presented a tweet from SBF in 2019 in response to a user’s concerns about the potential conflict of interest between FTX and Alameda. In the tweet, SBF explicitly stated, “Alameda is a liquidity provider on FTX, but their account is just like everyone else’s.” This tweet directly contradicts the allegations presented in the trial.

As the trial proceeds, these revelations continue to have a significant impact on the crypto community, raising questions about transparency, financial practices, and the relationship between crypto exchanges and affiliated trading firms. The trial is expected to resume on October 10, with the prosecution likely to call additional witnesses to testify. The crypto industry will closely monitor the proceedings, given the potential implications for market integrity and regulation.