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Unchained

SBF Trial, Day 3: Why a True Believer in FTX Flipped Once He Learned One Fact

Unchained

Laura Shin

Tech News, Business News, News

4.61.3K Ratings

🗓️ 6 October 2023

⏱️ 6 minutes

🧾️ Download transcript

Summary

Laura reports on the testimony of three witnesses on Thursday, including one who declared that “FTX defrauded all of its customers” and another stating that he had committed financial crimes at the direction of Sam Bankman-Fried.   Former FTX software developer Adam Yedidia, Paradigm co-founder Matt Huang, and FTX and Alameda co-founder Gary Wang filled in the details of different aspects of FTX and Alameda’s business. Huang’s testimony detailed how Paradigm expressed concern about FTX’s lack of corporate controls and how the company was “owned and controlled by Sam.” Wang has only started his testimony but has already said he implemented advantages for Alameda into FTX’s code at Bankman-Fried’s direction.  Yedidia’s account had the most emotional details, describing how he had a strong belief in the company, to the point where, when employees began leaving FTX, he had messaged Bankman-Fried that he loved him and wasn’t going anywhere, but that it flipped once he realized “FTX defrauded all of its customers.” Find out what new information caused him to have a change of heart in this episode.  If you need to catch up, don’t miss our recent coverage on the trial: SBF Trial, Day 2: DOJ: Sam Bankman-Fried ‘Lied’ His Way to ‘Wealth, Power, and Influence’ SBF Trial, Day 2: DOJ Says Sam Bankman-Fried ‘Lied’ While Defense Claims His Actions Were ‘Reasonable’ SBF Trial, Day 1: Possible Witnesses Include FTX Insiders, Big Names in Crypto, and SBF’s Family Here’s How Sam Bankman-Fried’s High-Stakes Trial Could Play Out SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case The High-Stakes Trial of Sam Bankman-Fried Begins: What to Expect In the SBF Case, Elite Corruption Is What’s Really on Trial Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Hi everyone, Laura here with your unchained recap of day three of the criminal trial for

0:08.8

Sam Pinkman Freed.

0:10.9

Three people testified during the Sam Pinkman Freed trial Thursday with one declaring

0:15.1

that FTX, quote, defrauded all of its customers and another stating that he had committed financial

0:20.6

crimes.

0:21.9

Former FTX software developer Adam Yidditya, paradigm co-founder Matt Huang and FTX co-founder

0:27.8

Gary Wang took the witness stand answering questions about their interactions with

0:31.7

Pinkman Freed and his business dealings.

0:34.5

Yidditya, who finished his two day testimony on Thursday, shared with the court why he

0:38.9

resigned from FTX.

0:40.8

In December 2021, Yidditya became aware of a bug in FTX's code base that overstated how

0:46.6

much money Alameda Research owed FTX.

0:50.5

When FTX customers deposited Fiat money, namely the US dollar, into the exchange, sometimes

0:57.0

they would route it to an account at Silvergate Bank, controlled by Alameda Research, but under

1:02.2

the name North Dimension.

1:05.0

This was tracked internally in the FTX database with an account called Fiatatftx.com.

1:12.1

At the time the bug was discovered, FTX's internal system had mistakenly indicated that Alameda

1:18.2

Research owed $500 million more than it actually owed to FTX customers.

1:24.0

By the time it was fixed in June 2022, it revealed that Alameda owed $8 billion to FTX customers,

1:31.7

a large and concerning number to Yidditya.

1:34.7

At this point, Yidditya had a conversation with Pinkman Freed in the paddle tennis courts

1:38.6

at Albany, the luxury community where they lived in the Bahamas.

...

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