Day 4 - October 6, 2023

On direct examination, Gary Wang testified that FTX’s code and database settings allowed Alameda to maintain negative balances, avoid automatic liquidation, and use a credit line ultimately set above $65 billion. He said those advantages were not disclosed and that Alameda’s negative balance represented withdrawals of customer money. Wang also described a publicly displayed insurance-fund figure calculated separately from the real fund, a June 2022 review showing Alameda approximately $11 billion negative after an accounting correction, and an approximately $8 billion shortfall identified during the November withdrawal crisis. He testified that Bankman-Fried later told him to continue asset transfers directed toward Bahamian authorities despite contrary instructions from U.S. bankruptcy counsel. Wang acknowledged four felony guilty pleas and said he hoped his cooperation would help him avoid prison. On cross-examination, Wang agreed that Alameda initially provided market making, stablecoin conversion, new-token liquidity, and liquidation-backstop services for FTX. He explained that the liquidation exemption was intended to protect both Alameda and the market from the effects of rapidly liquidating a large position. He said the credit limit increased as earlier ceilings were reached, that actual borrowing never approached $65 billion, and that he could not recall who selected the final figure. Wang also testified that he accepted Bankman-Fried’s judgment that Alameda’s borrowing was permissible after including other accounts and FTT in a recalculation, although Wang was uncertain and had not checked FTX’s terms of service. After the jury left, the court asked counsel to consider whether the “buried facts doctrine,” or an analogous principle, might affect the jury charge.