Co-founder Wang says FTX code allowed Alameda’s ‘unlimited withdrawals’

Two former FTX and Alameda employees, Gary Wang and Adam Yedidia, as well as Paradigm co-founder Matt Huang, testified in court Thursday


Artwork by Crystal Le


FTX co-founder and former Chief Technology Officer Gary Wang told a court Thursday that he built “special privileges to Alameda Research” into the exchange code he wrote.

The jury heard testimony from three witnesses in Manhattan today as part of the trial of Sam Bankman-Fried: Wang, former FTX developer Adam Yedidia, and Paradigm co-founder Matt Huang.

Co-founder in focus 

Wang, whose account closed out the day, said Bankman-Fried directed him to provide advantages for Alameda not available to FTX customers, such as the ability to place orders slightly faster than other market makers.

This disclosure came as part of a broader admission of financial crimes by Wang. In the statement, Wang admitted that he committed securities fraud, wire fraud and commodities fraud. He alleged that other FTX insiders, including Bankman-Fried, Caroline Ellison and Nishad Singh, also committed such crimes. 

Wang pleaded guilty last December and agreed to cooperate with prosecutors, as Blockworks previously reported. 

Read more: SBF said FTX was not ‘bulletproof’ months before demise, testimony reveals

Wang explained that these privileges meant that Alameda could make unlimited withdrawals from its accounts, even if the balance went negative or below zero. A normal trader would need sufficient funds or enough collateral to withdraw, Wang said.

None of these advantages were known to the public, Wang said. 

Alameda’s special privileges, according to Wang, culminated in a $8 billion hole — liabilities owed to FTX customers by the time the exchange entered bankruptcy last year. 

Prosecutors pressed Wang on Alameda’s $65 billion line of credit, because Alameda served as a market maker and liquidity provider on the exchange. Wang said that typically, market makers have a line of credit in the millions, not the billions. 

“With a B,” Wang emphasized. 

The prosecution sought to demonstrate that Bankman-Fried and Wang were unequal within the FTX/Alameda power structure — specifically, that Bankman-Fried was at the helm as he allegedly stole funds from FTX customers. 

To support this argument, prosecutors showed a signed document that said Bankman-Fried owned 90% of Alameda, while Wang owned 10%. Similarly, they demonstrated that Bankman-Fried was the majority owner of FTX. 

In the event of a disagreement, “in the end, it was Sam’s decision to make,” Wang testified.

Other perspectives 

By contrast, the testimony from Paradigm’s Huang represented a zoomed-out view — specifically, how FTX’s collapse impacted venture capital firms like his. 

Huang testified that he held concerns about the “entanglement” between FTX and Alameda when he was considering making an investment into FTX. But Paradigm moved forward with its investment, as the perceived strengths and opportunities were too compelling to pass, according to Huang.

In total, Paradigm invested around $278 million into FTX and FTX US, the exchange’s American affiliate. Asked about the current valuation by the prosecution, Huang told the court: “We have marked it down to zero.”

Today’s court proceedings also featured some momentary drama. 

Yedidia, also a college friend of Bankman-Fried, bluntly told the court that “FTX defrauded all its customers.” 

Yet this statement was later ultimately stricken from the court record, a move both parties agreed upon. 

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research



Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495B in value locked, doubling Uniswap's Base deployment.


The former Valkyrie CEO chats with Blockworks about what she has her eye on as Cypherpunk Holdings’ new leader


Thursday’s CPI report shows prices are coming down more quickly than analysts had anticipated, renewing hope that central bankers will cut rates in the fall


If we tokenize all assets in a speculative rush, the risk of creating illiquid markets and trapped value will manifest on a large scale


Plus, Trump is headed to the heart of Bitcoinlandia with a speaking appearance at the Bitcoin 2024 conference


Meanwhile, stocks rally after Jerome Powell finishes his Capitol Hill tour


Plus, Blinks have reshaped many people’s understanding of what blockchains are capable of