In a courtroom drama that could redefine the landscape of the cryptocurrency world, FTX co-founder Gary Wang took the stand to testify against former CEO Sam Bankman-Fried (SBF), who is contesting multiple fraud charges in connection with the November 2022 multi-billion dollar collapse of the crypto exchange FTX.
The Need for Slow Speech
The trial took an unexpected turn when Judge Lewis Kaplan reportedly interrupted Wang’s testimony with a plea: “Mr. Wang, could you slow down?” The judge’s request for a more measured pace in Wang’s speech sent shockwaves through the courtroom, hinting at the gravity of the allegations being presented.
Wang’s allegations against SBF were delivered with lightning speed, leaving observers stunned. Among the most damning claims was Wang’s assertion that there were no restrictions on the amount of money available to FTX’s investment company, Alameda Research. Wang boldly stated, “We allowed Alameda to withdraw unlimited funds,” a revelation that has sent ripples of concern throughout the crypto community.
The Power of a Name
Wang went on to divulge that SBF deliberately chose the name “Alameda Research” for its professional connotations, rather than a name related to crypto trading. This choice was made to facilitate the process of obtaining a bank account, underscoring the lengths to which FTX allegedly went to maintain an air of legitimacy.
Judge Kaplan probed deeper, questioning how these privileges were embedded within FTX’s supposed safeguards. Wang cryptically responded, “It was in the code,” leaving the courtroom pondering the extent of the alleged wrongdoing.
The courtroom drama unfolded against the backdrop of FTX’s precipitous financial decline. In early November 2022, FTX’s native token, FTT, traded at $26.10. Following the exchange’s collapse, FTT’s value plummeted to a mere $1.57. Currently, it hovers at $1.22, symbolizing the catastrophic repercussions of the alleged misconduct.
A Tale of Contrasting Roles
Wang also shed light on the stark contrast between his role at FTX and that of SBF. While he claimed to have focused solely on coding, SBF appeared to wear multiple hats, including media engagement, lobbying, and investor relations.
Lastly, it was revealed that Wang’s compensation package amounted to $200,000, a modest sum compared to his reported 17% equity stake in the company, which once bestowed upon him the title of “billionaire.” These revelations underscore the gravity of the allegations and the potential consequences for both FTX and its former leadership.
As the trial unfolds, the cryptocurrency community watches with bated breath, anticipating the verdict’s impact on the industry and its regulatory future.