After Yedidia, the prosecution brought Matt Huang to the stand. Huang is the founder of Paradigm, a crypto investment firm that took a stake in FTX.
Huang spoke to the ways prospective investors were allegedly misled by Bankman-Fried about the relationship between FTX and Alameda, which was also a customer of the FTX exchange. When FTX was pitching for investment Paradigm was “told that there was no preferential treatment for Alameda,” said Huang.
But in practice, the prosecution claims, Alameda was exempted from various protections designed to prevent customers from racking up large amounts of debt, increasing the risk of financial trouble at FTX. The implication is that Bankman-Fried defrauded investors by failing to inform them of certain arrangements that might have raised concern.
Next up was FTX co-founder and CTO Gary Wang, pictured in the sketch below, right, whose testimony continues today. Wang didn’t have long on the stand before the end of play and the standout exchange came early on:
Prosecution: “Did you commit financial crimes while working at FTX?”Wang: “Yes.”Prosecution: “What types of crimes did you commit?”Wang: “Wire fraud, securities fraud, and commodities fraud.”Prosecution: “Did you commit these crimes by yourself or with other people?Wang: “With other people.”Prosecution: “Who were the main people you committed these crimes with?”Wang: “Sam Bankman-Fried, Nishad Singh, and Caroline Ellison.”
Gary Wang, cofounder and CTO of FTX, testified for the first time on Thursday, October 5.Illustration: JANE ROSENBERG/REUTERS