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Unchained

SBF Trial, Day 4: SBF's Lawyers Annoy Judge Kaplan, While Wang Reveals Alameda’s Special Privileges

Oct 7, 2023
In a dramatic courtroom scene, Gary Wang shares how Alameda's privileges allowed it to borrow an astonishing $8 billion from FTX, using customer funds. He reveals Alameda's unique access to a $65 billion line of credit, far exceeding other users. Tensions rise as the judge expresses annoyance at repetitive questioning from SBF's lawyers. Additionally, concerns about the cryptocurrency FTT and its role in inflating Alameda’s balance add layers to the unfolding story. The courtroom drama is as captivating as the revelations!
09:32

Podcast summary created with Snipd AI

Quick takeaways

  • Alameda had special privileges in FTX's code, allowing them to have a negative balance and borrow funds from the exchange.
  • Alameda had a $65 billion line of credit, surpassing any other customer on the exchange.

Deep dives

Alameda's special privileges and hidden advantages on FTX

During the criminal trial of Sam Bingpin-Fried, co-founder of Alameda Research and FTX, Gary Wong testified that Alameda had special privileges programmed into FTX's code, such as the ability to have a negative balance on its account. This allowed Alameda to withdraw more funds from FTX than it actually had, essentially borrowing from the exchange. These advantages were not disclosed to the public, FTX customers, or investors. Alameda's account was immune to being liquidated, unlike other FTX customers, due to this hidden feature. Wong also revealed that Alameda had a line of credit worth $65 billion, far higher than any other customer on the exchange.

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