Gary Wang, co-founder of FTX, revealed more details of Alameda Research’s corrupt relationship with his exchange during Sam Bankman-Fried’s fraud trial on Friday. Wang claimed that the function required for Alameda to steal client funds had been baked into FTX’s computer systems back in 2019. Alameda was granted three special privileges at FTX compared to other customers, including the “allow negative” feature, which allowed them to trade with more funds than they had in their account. This feature was later exploited to withdraw $8 billion worth of fiat and crypto beyond what the trading firm held in its account. Alameda was also privy to an outsized $65 billion line of credit from FTX, while other customers could only access up to $1 billion. Wang also asserted that Bankman-Fried had witnessed Alameda’s balance firsthand, contradicting his claims in interviews that he was unaware of the state of Alameda’s finances leading up to its collapse. Bankman-Fried’s lawyers argued that Alameda’s balance was allowed to go negative so that it could serve as a market maker for FTT, FTX’s native exchange token. Wang clarified, however, that the trading desk’s exemption from auto liquidation was partly because Alameda’s position was so large that it could “cause damage.”

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Information	Details
Geography	North America
Countries
Sentiment	negative
Relevance Score	8
People	Gary Wang, Inner City Press., Sam Bankman-Fried
Companies	PrimeXBT, Inner City Press, Binance, FTX, Alameda Research
Currencies	DeFiato, US Dollar, Ethereum, Bitcoin, FTX
Securities	None