He was in a real pickle.
Sam Bankman-Fried admitted that his crypto hedge fund may have trouble covering $8 billion in debt while playing “padel” tennis – a racket sport similar to pickleball – at the luxury Bahamian resort where he lives in a $35 million penthouse, a former close associate said. testified at the trial of an accused fraudster in Manhattan Thursday.
Former FTX developer Adam Yedidia testified that he raised concerns about the large amount Bankman-Fried’s trading firm, Alameda Research, owed his cryptocurrency exchange FTX in June or July 2022, just months before it crashed.
“It was a huge debt, and I wanted to know that Alameda could pay it,” Yedidia, 31, recalled in Manhattan federal court for a powwow at the luxury Albany resort, whose investors include Justin Timberlake and Tiger Woods.
Bankman-Fried later admitted that her company was “not bulletproof anymore,” while she “looked nervous,” Yedidia testified.
Yedidia also revealed that he warned Bankman-Fried, 31, against dating Caroline Ellison — the former CEO of Alameda Research and his ex-girlfriend, who is now expected to be the feds’ main witness against him.
Sam Bankman-Fried admits that his crypto hedge fund may have trouble covering $8 billion in debt while playing “padel” tennis.REUTERS
Gary Wang, co-founder of the crypto exchange and Bankman-Fried’s former college roommate at MIT, on Thursday admitted that Bankman-Fried instructed him to write computer code that would allow Alameda to have “special privileges” to withdraw essentially “unlimited” user funds. on FTX — while users are left in the dark.
The revelations came on the second day of the former billionaire’s blockbuster trial in Manhattan federal court — and as Bankman-Fried sat calmly typing on her internet-free laptop at the defense table.
Federal prosecutors allege that missing funds brought by Yedidia after a “padel” match with the crypto mogul were actually stolen from FTX customers’ accounts, leaving them unable to withdraw digital assets they believed they owned.
The confession came at a luxury Bahamian resort where he lives in a $35 million penthouse.DOJ
A few months later, as pressure mounted on FTX as customers demanded to withdraw their funds, Yedidia sent a message of support to Bankman-Fried.
“I said, I love you, Sam. I’m not going anywhere, don’t worry,” Yedidia recalled sending a message using the encrypted app Signal.
But Yedidia eventually resigned from the embattled company days later.
“What changed?” asked federal prosecutor Danielle Sassoon on Thursday.
“I learned that Alameda has been using FTX customer deposits to repay its loans to creditors,” Yedidia said.
“What Alameda did seemed like the wrong thing to do.”
Bankman-Fried later admitted that her company was “not bulletproof anymore,” while she “looked nervous,” Yedidia testified.AP
Bankman-Fried attorney Christian Everdell tried to break through the prosecution’s narrative about the accused fraudster living the high life — pointing out his modest de-facto uniform of T-shirt and shorts and that he shared a Bahamas dig with nine other people .
“This is basically living in a dormitory?” Everdell asked Yedidia, who went to MIT with Bankman-Fried.
“It’s like a hostel where I live with other people, but it’s not like a hostel because it’s fancy,” Yedidia answered.
FTX co-founder Wang pleaded guilty to his role in the scheme and testified as part of a cooperation agreement with prosecutors.
He is set to resume his testimony on Friday morning.
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Source: thtrangdai.edu.vn/en/
