Crypto FTX co-founder admits ‘we did it’

In contrast, defence lawyers told the court this week that Mr Bankman-Fried had no criminal intent as he took actions to try to save his businesses after the cryptocurrency market collapsed.

Bankman-Fried visibly shaking

Mr Wang, 30, said Mr Bankman-Fried instructed him to sign documents allowing up to $US300 million in funds from FTX customer accounts to be transferred to Alameda to trade cryptocurrencies, sometimes at an unfair advantage to other FTX customers.

Asked by the prosecution whether he and other FTX executives committed fraud, Mr Wang immediately answered “yes” and said the crimes were “wire fraud, securities fraud, and commodities fraud”. He then pointed out Mr Bankman-Fried who was sitting in the courtroom visibly shaking.

He said Caroline Ellison, Alameda’s former chief executive and Mr Bankman-Fried’s former girlfriend, and Nishad Singh, the former engineering director at FTX, were also involved in the fraud.

Mr Wang’s testimony potentially undercuts Mr Bankman-Fried’s contention that he was not closely involved with the running of Alameda and relied instead on ex-girlfriend Ms Ellison.

Mr Wang said FTX gave special privileges to Alameda, allowing the “withdrawal of unlimited funds for the platform, and we hid that from the public”.

He said Alameda was allowed to take any position it wanted “without any limit” and had the “ability to place orders on the platform slightly faster than other customers”.

Mr Wang, who was once a billionaire with 10 per cent ownership of Alameda Research and a 17 per cent equity stake in FTX, was asked about the genesis of the name of the affiliated hedge fund.

He said the word research was important because it “sounded prestigious”.

“It’s also better if the name didn’t include cryptocurrency because that would make it easier to get office leases and things like that,” Mr Wang said.

A video was played of Mr Bankman-Fried talking about the evolution of the names and how calling the company “Shit Coin Day Trader” would not have helped it get loans from a bank.

Prosecutors are expected to hear testimony from Ms Ellison on how he orchestrated a conspiracy to use $US10 billion of FTX’s customers funds for uses that were kept secret.

Also giving evidence was Matt Huang, co-founder of crypto investment firm Paradigm, who told of his company’s $US278 million in investments in FTX and FTX US. He said he did not know FTX was using customer funds to lend out to Alameda to trade cryptocurrencies and that he “would have wanted to know more”.

Mr Huang also said he did not know Alameda had been made exempt from a special FTX feature known as the “liquidation engine” which prevented FTX customers from not being able to cover any losses. The exemption, which was written into FTX code, allowed Alameda to continually increase its line of credit until it grew to about $US8 billion.

Earlier in the day, Adam Yedidia, another Massachusetts Institute of Technology classmate who went to work at FTX, testified that Mr Bankman-Fried was aware and concerned about a huge potential shortfall at FTX from loans to Alameda five months before both companies collapsed. Mr Yedidia told jurors he was testifying under a grant of immunity from prosecution.