During the Sam Bankman-Fried trial this week, Adam Yedidia, a close friend and former employee of the ex-FTX chief, delivered his testimony. Yedidia had a brief stint as an intern at Alameda Research, a quantitative trading firm linked to FTX, before he transitioned to FTX’s Hong Kong office in early 2021. Additionally, he was part of the FTX executive team residing at the Albany Place luxury resort in the Bahamas.
Ex-FTX Developer Talks $8 Billion Code Glitch and Use of Client Funds
On Thursday, Yedidia returned to the witness stand for his second day. As Wednesday’s session concluded, he revealed that he got a call informing him that Alameda was misusing client funds. Disturbed by this revelation, Yedidia stepped down. Soon after, FTX faced bankruptcy, grappling with liquidity challenges and failing to process client withdrawals.
Much of Yedidia’s questioning was broadcast on the social platform X, courtesy of Matthew Russell Lee from Inner City Press. Since his resignation, Yedidia hasn’t communicated with Sam Bankman-Fried, especially after discovering the mishandling of client funds. He further disclosed that FTX occasionally moved client deposits to an Alameda Research account without client awareness.
A technical glitch he discovered led to a staggering $8 billion underestimation in Alameda’s liabilities. When Yedidia voiced his apprehensions to Bankman-Fried, he was pacified and told everything was in order. After rectifying the error himself, Yedidia briefed Bankman-Fried on the situation through Signal. However, that conversation was allegedly set to auto-delete and is now lost. Yedidia recalled Bankman-Fried’s advice to use the auto-delete feature, suggesting it was too risky to retain messages.
In the midst of the unfolding chaos, Yedidia initially assured Sam of his loyalty. However, his stance shifted upon learning that Alameda had tapped into client deposits to settle its debts, deeming it a “flagrantly wrong thing.” Yedidia also shed light on Bankman-Fried’s ties with Alameda’s CEO, Caroline Ellison, and their casual intimate encounters. When Bankman-Fried confided about his intimacy with Ellison, he sought Yedidia’s opinion on pursuing a relationship, to which Yedidia advised against.
U.K. Trader Discusses £100,000 Loss, Trust in Bankman-Fried, FTX
Yedidia took the stand under an immunity deal he struck with federal authorities. The agreement shields him from prosecution for any wrongdoings in this case, provided he doesn’t lie under oath. Alongside Yedidia, Marc-Antoine Julliard, a trader from the U.K., shared his account. Julliard revealed a staggering loss of about 100,000 pounds due to the FTX debacle.
Julliard held Bankman-Fried in high regard, believing FTX to be a reliable and credible exchange. He delayed his fund withdrawal from FTX, basing his decision on Bankman-Fried’s updates on X (previously known as Twitter). From those posts, Julliard was led to believe that withdrawals were proceeding smoothly. Unfortunately, this choice proved to be a bad mistake.
What do you think about Adam Yedidia’s testimony? Share your thoughts and opinions about this subject in the comments section below.
#News, #Crypto, #CryptoExchange, #Cryptocurrency, #Ftx, #SamBankmanFried