He found himself in a difficult situation.
Sam Bankman-Fried, the accused fraudster, confessed that his crypto hedge fund may struggle to cover an $8 billion debt while playing “padel” tennis at a luxurious Bahamian resort. He resided in a $35 million penthouse. A former close colleague, Adam Yedidia, testified about raising concerns regarding the massive sum owed by Bankman-Fried’s trading firm, Alameda Research, to his cryptocurrency exchange, FTX. This occurred a few months before the firm eventually collapsed.
“It was a very substantial debt, and I wanted assurance that Alameda could repay it,” Yedidia, 31, recalled. He shared this during a discussion at the Albany luxury resort, which counts Justin Timberlake and Tiger Woods among its investors.
Bankman-Fried then openly admitted that his companies were “no longer invincible” while displaying signs of nervousness, as testified by Yedidia.
Yedidia also disclosed that he warned the 31-year-old Bankman-Fried against dating Caroline Ellison, the former CEO of Alameda Research and his ex-girlfriend. Ellison is now anticipated to be the key witness for the prosecution.
Gary Wang, Bankman-Fried’s former college roommate at MIT and co-founder of the crypto exchange FTX, admitted on Thursday that Bankman-Fried instructed him to write computer code that allowed Alameda to have the “special privilege” of withdrawing “unlimited” user funds from FTX. Meanwhile, users were completely unaware of this activity.
These revelations emerged on the second day of Bankman-Fried’s sensational trial in Manhattan federal court, while the accused billionaire sat calmly at the defense table, typing away on his laptop without internet access.
According to federal prosecutors, the funds brought up by Yedidia after the “padel” match with Bankman-Fried were actually stolen from FTX customers’ accounts. As a result, these customers were unable to withdraw the digital assets they believed they owned.
Months later, as pressure grew on FTX due to customers demanding to withdraw their funds, Yedidia sent Bankman-Fried an encouraging message via the encrypted app Signal. “I said, I love you, Sam. I’m not going anywhere, don’t worry,” Yedidia recalled. However, Yedidia ultimately resigned from the troubled company a few days later.
“What changed?” federal prosecutor Danielle Sassoon asked on Thursday.
“I learned that Alameda had utilized FTX customer deposits to repay its loans to creditors,” Yedidia replied. “It seemed like a flagrantly unethical action for Alameda to take.”
Christian Everdell, Bankman-Fried’s attorney, attempted to undermine the prosecution’s portrayal of the accused fraudster as living a lavish lifestyle. Everdell pointed out Bankman-Fried’s modest attire of t-shirt and shorts, as well as the fact that he shared the luxurious property in the Bahamas with nine other individuals.
“Would you say it was akin to dorm living?” Everdell queried Yedidia, who attended MIT with Bankman-Fried.
“In the sense that I lived with others, yes, but it was far from a luxurious dorm experience,” Yedidia responded.
The co-founder of FTX, Gary Wang, pleaded guilty to his role in the scheme and is now providing testimony as part of a cooperation agreement with the prosecutors. He is expected to continue his testimony on Friday morning.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
