On October 5, during the ongoing criminal trial of Sam “SBF” Bankman-Fried, Adam Yedidia, the former CEO’s roommate at MIT and FTX developer, testified about the $8 billion deficit reported by the crypto exchange before its bankruptcy. Yedidia took the stand at the United States District Court for the Southern District of New York, providing crucial information about the connection between FTX and Alameda Research. This information plays a central role in SBF’s alleged fraud.
Yedidia revealed that he had informed Bankman-Fried about a bug in FTX’s code that caused a massive error, resulting in the $8 billion deficit. Assistant U.S. Attorney Danielle Sassoon questioned Yedidia further and learned that his resignation from FTX came after the revelation that Alameda Research had used customer deposits to pay off its loans. Yedidia also claimed that Bankman-Fried had asked him to discuss FTX’s code using the messaging app Signal.
Bankman-Fried had instructed everyone at the company to use Signal because it had an auto-delete feature. He believed that keeping messages around could be detrimental to the company if regulators found anything they didn’t like. Auto-delete would ensure that potentially incriminating messages were not present if regulators conducted an investigation.
During the trial, it was revealed that SBF’s former roommate confronted him in the Bahamas near a paddle tennis court regarding the $8 billion hole in FTX. Bankman-Fried tried to reassure him about the situation. The line of questioning also touched on Bankman-Fried’s personal relationship with former Alameda Research CEO Caroline Ellison. Yedidia stated that Bankman-Fried had mentioned that they had sexual relations and asked him if he believed they should date. Yedidia responded with a firm “no.”
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Caroline Ellison is expected to testify against Bankman-Fried as part of her plea agreement with prosecutors. In August, Judge Lewis Kaplan revoked SBF’s bail following allegations of witness intimidation. The prosecution argued that Bankman-Fried had revealed portions of Ellison’s personal journals to New York Times reporters. The criminal trial began on October 3 with jury selection and is expected to continue through November.
After Yedidia, Gary Wang, one of the co-founders of FTX, will likely testify in the trial. In addition, prosecutors are considering calling former FTX engineering director Nishad Singh and former FTX chief operating officer Constance Wang as witnesses.
The trial has raised concerns about trust and reliability in the crypto exchange industry. The collapse of FTX has left many investors wary, questioning whether they can trust other crypto exchanges. As the trial progresses, it will provide further insights into the operations of FTX and its alleged fraudulent activities.
In conclusion, the ongoing criminal trial of Sam Bankman-Fried has seen key witnesses testify about the $8 billion deficit reported by FTX before its bankruptcy. Adam Yedidia, SBF’s former roommate and FTX developer, provided crucial information regarding the connection between FTX and Alameda Research. The trial is expected to continue shedding light on the alleged fraud and raising questions about trust in the crypto exchange industry.
