Adam Yedidia, formerly a developer at FTX, provided testimony pertaining to his profound insights into the utilization of customer funds by the crypto exchange. He asserted, “Alameda had employed customer deposits to fulfill its financial obligations.”
During the third day of the criminal trial concerning Sam “SBF” Bankman-Fried, the former CEO, Adam Yedidia, a fellow alumnus from MIT and a developer at FTX, took the stand. Yedidia’s testimony revolved around the staggering $8-billion deficit that the crypto exchange had disclosed prior to declaring bankruptcy.
According to reports emanating from Inner City Press, originating from the United States District Court for the Southern District of New York, Yedidia assumed the role of a key witness on October 5th. He shed light on the intricate connections linking the crypto exchange with Alameda Research, a pivotal aspect at the heart of SBF’s alleged fraudulent activities. Yedidia purportedly apprised Bankman-Fried of a critical flaw in FTX’s underlying code, which inadvertently ensured that “Alameda’s financial obligations remained unchanged,” resulting in a staggering error of approximately $8 billion.
“How long do you reckon it’ll take until we’re impervious to criticism again?” Yedidia inquired of SBF, to which he responded, “Anywhere from six months to three years. I’m rather apprehensive about it.”
When questioned by Assistant U.S. Attorney Danielle Sassoon, Yedidia allegedly disclosed that his decision to resign from FTX was catalyzed by the revelation that “Alameda had employed customer deposits to service its outstanding loans.” He further contended that Bankman-Fried had urged him to address the intricacies of FTX’s code through the secure messaging platform, Signal:
“He explicitly instructed me to employ Signal for communication, and he extended this directive to the entire company. Notably, Signal featured an auto-delete function. He opined that preserving messages indefinitely posed inherent risks. In the event that regulators stumbled upon unfavorable content, it could have detrimental ramifications for the company.”
Reportedly, SBF’s former roommate later confronted him near a “paddle tennis court” in the Bahamas concerning the $8-billion deficit. During this encounter, the CEO sought to provide reassurances regarding the dire situation. Sassoon’s line of inquiry also delved into Yedidia’s knowledge of Bankman-Fried’s personal relationship with former Alameda Research CEO, Caroline Ellison:
“SBF confided in me that he and Caroline had engaged in an intimate relationship, and he sought my opinion on whether they should pursue a romantic involvement. I counselled against it.”
In accordance with her plea agreement with prosecutors, Ellison is slated to testify against Bankman-Fried. The presiding judge overseeing the criminal trial, Lewis Kaplan, revoked SBF’s bail in August following allegations by the prosecution that he had engaged in witness intimidation. This stemmed from his disclosure of some of Ellison’s personal journals to journalists at The New York Times.
The commencement of Bankman-Fried’s initial criminal trial on October 3rd, marked by jury selection, is projected to extend through November. Gary Wang, one of FTX’s co-founders, is anticipated to provide testimony following Yedidia. Prosecutors have indicated that they may also summon former FTX engineering director Nishad Singh and former FTX chief operating officer Constance Wang as witnesses.
