Gary Wang: SBF lied to clients about FTX’s pre-bankruptcy asset status

PANews reported on October 7 that according to Bloomberg, a few days before FTX filed for bankruptcy, SBF tweeted to assure customers and investors that the exchange and its assets were in good condition. FTX co-founder Gary Wang testified in court on Friday, calling this a lie and saying, "FTX is not in a good position, and its asset status is not good. The funds belong to the customer, and the customer did not allow us to use it for other things." For more than four hours on the witness stand, Gary Wang recounted the final days leading up to FTX's collapse and detailed how he and SBF implemented a multibillion-dollar plan that made FTX's collapse inevitable. .

On Friday, under questioning by Assistant U.S. Attorney Nicolas Roos, Gary Wang testified about the secret mechanism that allowed funds to flow from FTX to Alameda. He stated that SBF requested the addition of a backend for Alameda that would allow for negative balance functionality. Although some large clients have also received lines of credit from FTX. But except for Alameda, no one has more than $1 billion in credit lines, and most clients have much smaller lines of credit, in the millions. Alameda's quota is $65 billion.

Additionally, the SBF directed Alameda not to be subject to the clearing rules applicable to other FTX accounts. Gary Wang explained that accounts that were likely to suffer losses sold their positions to market makers before the losses occurred. This feature exists to protect the exchange and other customers.