1.Gary Wang — Testimony (Part 3)

MR. EVERDELL: Thank you, your Honor. GARY WANG, resumed. CROSS-EXAMINATION (cont'd)

MR. EVERDELL: Good morning, Mr. Wang.

MR. EVERDELL: I want to talk to you about the time period in June of 2022. All right?

MR. EVERDELL: I believe you testified before that in June 2022 the prices of a number of cryptocurrencies fell by a large amount, is that right?

MR. EVERDELL: Were you following the prices of cryptocurrencies at the time, generally?

MR. EVERDELL: Were you following the prices of Bitcoin at the time?

MR. EVERDELL: You can follow them on publicly available websites, right?

MR. EVERDELL: Like Yahoo Finance?

MR. EVERDELL: If we could call up, please, just for the witness Defense Exhibit 1614, please.

MR. EVERDELL: Do you see that in front of you, Mr. Wang?

MR. EVERDELL: Do you know what that is?

MR. EVERDELL: From January 2022 to October 2022?

MR. EVERDELL: Your Honor, the government offers Defense Exhibit 1614.

MR. EVERDELL: The defense offers.

MR. EVERDELL: Mr. Wang, based on what you are seeing in front of you, does this, in your opinion, fairly and accurately represent the fluctuations of the price of Bitcoin during that time period?

MR. EVERDELL: Your Honor, the defense offers defense Exhibit 1614, please.

MR. EVERDELL: If we could publish that to the jury, please.

MR. EVERDELL: Mr. Wang, looking at what's in front of you, you see the graph, it begins over on the left side, that's January of 2022?

MR. EVERDELL: Over on the right side is October 2022, right?

MR. EVERDELL: Just looking at this peaks and valleys here, I am going to see if I can circle one here. You see where I circled?

MR. EVERDELL: That's around June of 2022, right?

MR. EVERDELL: What do you observe happening here?

MR. EVERDELL: And there was a previous fall here, right, in May?

MR. EVERDELL: We can take that down.

MR. EVERDELL: So that fall in the price of Bitcoin caused a downturn in the crypto markets, isn't that right?

MR. EVERDELL: And some of the Alameda's lenders were asking for their money back at that time?

MR. EVERDELL: I believe you testified that around that time Sam gave you and Nishad Singh and Caroline Ellison a project to calculate Alameda's total balances on FTX, is that right?

MR. EVERDELL: And what was the reason this project needed to be done at that point?

MR. EVERDELL: But you did work on this spreadsheet with Nishad and Caroline to calculate Alameda's balances on the FTX exchange?

MR. EVERDELL: And when you first calculated the balances, I think you said that it showed a debt that appeared way too big, is that right?

MR. EVERDELL: Meaning it looked like Alameda owed FTX billions more than it actually did?

MR. EVERDELL: But then you determined that the amount was overstated by about 8 billion because of the bug in the fiat account?

MR. EVERDELL: When you corrected for the bug, the actual number of fiat liability was, you said, roughly negative 11 million at that point.

MR. EVERDELL: You had known about the bug for several months, correct?

MR. EVERDELL: You think it had been discovered at the end of 2021, roughly?

MR. EVERDELL: But you hadn't gotten the chance to fix it yet?

MR. EVERDELL: So you knew about the debt that Alameda owed to FTX for a few months prior to the bug fix?

MR. EVERDELL: Did you think it was a problem when you first learned of it?

MR. EVERDELL: I'm asking about when you found out about the bug. You learned about the bug discovered in the end of 2021?

MR. EVERDELL: At that point -- let's move on to June of 2022, when you did the spreadsheet. All right?

MR. EVERDELL: If we can pull up Government's Exhibit 50, which is already in evidence, please, and we can go to sheet 2.

MR. EVERDELL: This is the spreadsheet that you worked on in June of 2022?

MR. EVERDELL: If you look at cells -- if you look at cells C13 and C14. You see those?

MR. EVERDELL: The top one, negative 19 billion, that is the fiat liability precorrection, right?

MR. EVERDELL: And below that is the correction itself?

MR. EVERDELL: And if you sum the two together, which is towards the bottom here -- I'll just circle it, if you can see it. Is that the sum there?

MR. EVERDELL: So the corrected sum is, you said, negative 11 billion, roughly?

MR. EVERDELL: And if you go -- that's just the fiat@ liability?

MR. EVERDELL: Again, just to remind ourselves, that reflects the amount of cash deposits that FTX customers had placed on Alameda's bank accounts, right?

MR. EVERDELL: Now, if you go to copy of sheet 2 and you go to that cell over at J2, which is now highlighted. You see that?

MR. EVERDELL: Where it says Gary's number, that's also roughly negative 11 billion, a little bit higher?

MR. EVERDELL: And that number represents the amount of all of Alameda's balances on the FTX exchange, right?

MR. EVERDELL: According to your calculations.

MR. EVERDELL: We can take that down.

MR. EVERDELL: Now, that number that we just looked at, the negative 11 billion, that represented just Alameda's balances on the FTX exchange, correct?

MR. EVERDELL: So that did not include any assets that Alameda held off of the FTX exchange?

MR. EVERDELL: If, for example, Alameda had cryptocurrency held on a different exchange, that spreadsheet would not reflect it?

MR. EVERDELL: So, for example, if Alameda held cryptocurrency on a different exchange than FTX, that spreadsheet would not reflect it?

MR. EVERDELL: Or if Alameda held any other assets that were not at FTX, it wouldn't reflect it?

MR. EVERDELL: Isn't it true that Alameda had several billions of dollars worth of assets that were held off of the FTX exchange?

MR. EVERDELL: Well, are you familiar with the term net asset value?

MR. EVERDELL: That's sometimes called NAV?

MR. EVERDELL: It just means that your assets minus your liabilities, right, roughly speaking?

MR. EVERDELL: If you have a positive NAV, you have more assets than you have liabilities, right?

MR. EVERDELL: Now, isn't it true that when you figured out the miscalculation caused by the fiat bug, you realized Alameda's overall NAV became positive?

MR. EVERDELL: So the overall NAV included all of Alameda's assets, no matter where they were held, right?

MR. EVERDELL: And in fact you felt relieved when you saw Alameda's NAV was positive after all of that, right?

MR. EVERDELL: Among other things, that meant that the fiat liability was secured by assets?

MR. EVERDELL: I am not talking about liquid versus nonliquid. I'm just talking about assets in general. There were assets more than liabilities at that point, correct?

MR. EVERDELL: That was enough to make you feel relieved, as you said?

MR. EVERDELL: And how did Caroline and Nishad appear to you when they learned this?

MR. EVERDELL: Isn't it true that you believed that they also felt relief?

MR. EVERDELL: Well, once you determined that the NAV was positive for Alameda, at that point Caroline paid back the lenders, isn't that right?

MR. EVERDELL: And isn't it true that Alameda's net asset value remained positive all the way up to November of 2022?

MR. EVERDELL: According to some calculations, Alameda's NAV was positive all the way through November of 2022?

MR. EVERDELL: Thinking back to the numbers that we just looked at in that spreadsheet, you said that the fiat@ liability that we looked at was roughly negative 11 billion, right?

MR. EVERDELL: And Alameda's total liability was roughly negative 11 billion on that spreadsheet, right?

MR. EVERDELL: On FTX?

MR. EVERDELL: So the fiat liability represented almost all of Alameda's debt to FTX in June of 2022, isn't that right?

MR. EVERDELL: I'm simply asking about the numbers on the spreadsheet. The numbers on the spreadsheet reflect about 11 billion liability for fiat and almost a total of 11 billion liability on the exchange, right?

MR. EVERDELL: Those are roughly equivalent.

MR. EVERDELL: Now, in the months following June 2022, there was a project to get a clearer picture of what Alameda's net asset value was, right?

MR. EVERDELL: And that included getting a clearer picture of the fiat@ liability that was owed by Alameda?

MR. EVERDELL: And I think by November of 2022, after that project had been completed, I think you estimated the fiat@ liability was roughly negative 8 billion.

MR. EVERDELL: You said that, in November of 2022, you estimated the debt around 8 billion, right?

MR. EVERDELL: Alameda's debt to FTX?

MR. EVERDELL: And the fiat@ liability in particular was around 8 billion?

MR. EVERDELL: We have been focusing on the balance of the fiat@ account just for now. But just to be clear, the fiat@ account is totally separate from the info@ account, right?

MR. EVERDELL: Let's step back to then June.

MR. EVERDELL: We can pull up Government's Exhibit 50.

MR. EVERDELL: In June, they were separate.

MR. EVERDELL: Let's look at, if we can go, sheet 2, please.

MR. EVERDELL: So we have looked at this page before, right, and we see in C13 and C14, that's the fiat@ liability, is that correct?

MR. EVERDELL: Now, if you look at C17.

MR. EVERDELL: Can you highlight that, please, that number.

MR. EVERDELL: That number refers to the account for info@alamedaresearch.com, right?

MR. EVERDELL: So that's what we have been calling the info@ account, right?

MR. EVERDELL: The main trading account?

MR. EVERDELL: For Alameda?

MR. EVERDELL: This is Alameda's main trading account on the FTX exchange?

MR. EVERDELL: And what I want to say, just to be clear, in at least June, as you are doing the spreadsheet, the fiat@ account is totally separate from the info@ account, right?

MR. EVERDELL: Because the fiat@ account was a ledger that kept track of FTX's customers' cash deposits that were sent to Alameda's bank accounts, right?

MR. EVERDELL: The customers wired those funds directly to Alameda's bank accounts, not to FTX, correct?

MR. EVERDELL: And if customers wanted to take cash withdrawals, the fiat@ account would keep track of the withdrawals too, right?

MR. EVERDELL: The info@ account, on the other hand, you said, was the main trading account, right?

MR. EVERDELL: And it had a bunch of different subaccounts?

MR. EVERDELL: Some of those subaccounts had spot margin enable on them, right?

MR. EVERDELL: So they could engage in spot-margin trading on that account?

MR. EVERDELL: And the main account could engage in futures trading, right?

MR. EVERDELL: They could do all that kind of margin trading on the main account?

MR. EVERDELL: Not the fiat@ account?

MR. EVERDELL: I think you testified on Friday that Alameda had withdrawn, you used the word withdrawn, 8 billion from FTX, right?

MR. EVERDELL: These are Alameda's own bank accounts, yes?

MR. EVERDELL: But if you're with withdrawing from the bank accounts, you're withdrawing from Alameda's bank accounts, correct?

MR. EVERDELL: You are not withdrawing them off of the exchange, is my point?

MR. EVERDELL: You recall being asked last week about Alameda's line of credit from FTX?

MR. EVERDELL: You testified that Alameda had a $65 billion line of credit?

MR. EVERDELL: So if Alameda borrowed any funds from FTX under its line of credit, that would be reflected in the info@ account, right?

MR. EVERDELL: Because the line of credit didn't apply to the fiat ledger that tracked the cash deposits?

MR. EVERDELL: So if Alameda withdrew funds from FTX to pay back its lenders in June and the months following, you would expect the info@ account liability to increase?

MR. EVERDELL: But not from the fiat account?

MR. EVERDELL: It would come from one of the accounts on the exchange.

MR. EVERDELL: You don't know one way or the other?

MR. EVERDELL: If it was cryptocurrency it would come from the info account?

MR. EVERDELL: I'm simply saying that, if there were a withdrawal from the exchange of cryptocurrency to pay back lenders who withdraw from the FTX exchange, that would be reflected in the info@ balance?

MR. EVERDELL: Now, the info@ account, we just looked at it, had a balance of negative roughly 2.7 billion in June of 2022, is that right?

MR. EVERDELL: That's what the spreadsheet reflects?

MR. EVERDELL: I think you testified as well that the main account or the info account had roughly the same balance of about negative 3 billion in late 2021.

MR. EVERDELL: But roughly between 2.7, 3 billion, depending on which subaccounts you're talking about, right?

MR. EVERDELL: Based on what you had seen in the spreadsheet in June and what you saw in the end of 2021, the info@ liability was roughly between 2.7 and 3 billion?

MR. EVERDELL: Fine. But either way, we are talking in the ballpark of 2.7 to 3 billion, right?

MR. EVERDELL: Well, focusing on June, where it's 2.7 in the main account, right?

MR. EVERDELL: You said that the line of credit it had was 65 billion, right?

MR. EVERDELL: Despite the line of credit that we talked about, it wasn't drawing on nearly that amount of money?

MR. EVERDELL: You don't know sitting here today, Mr. Wang, whether the info@ borrowing increased as a result of paying back the lenders, Alameda's lenders in June and the months following?

MR. EVERDELL: And if it did, you don't know by how much.

MR. EVERDELL: And you don't know, sitting here today, how the number that was paid back or -- compares to the amount of collateral that Alameda had on the exchange?

MR. EVERDELL: A moment, your Honor.

MR. EVERDELL: Mr. Wang, Alameda held assets on the FTX exchange, correct?

MR. EVERDELL: What was the main asset that was held by Alameda on the FTX exchange?

MR. EVERDELL: I'll put it this way. Did Alameda hold FTT on the FTX exchange?

MR. EVERDELL: And FTT was FTX's own token, right?

MR. EVERDELL: It stood for FTX token?

MR. EVERDELL: You helped create FTT, correct?

MR. EVERDELL: FTT was first introduced in 2019?

MR. EVERDELL: FTX customers could trade FTT on the FTX exchange.

MR. EVERDELL: FTT was also traded on other cryptocurrency exchanges?

MR. EVERDELL: FTX did not set the price of FTT on other exchanges?

MR. EVERDELL: It traded at a market price?

MR. EVERDELL: Do you recall what price FTT was trading at in 2022, before the days leading up to the bankruptcy?

MR. EVERDELL: Let's see if this refreshes your recollection.

MR. EVERDELL: Could we display just for the witness what's been marked as DX-1096.

MR. EVERDELL: Do you see that, Mr. Wang?

MR. EVERDELL: Does that refresh your recollection about what the price of FTT was trading at during 2022?

MR. EVERDELL: We can take that down then.

MR. EVERDELL: Your recollection refreshed, do you know roughly how much it was trading at during this time period in 2022?

MR. EVERDELL: Trading at between January of 2022 and up to the beginning of just first day of November of 2022.

MR. EVERDELL: Per token.

MR. EVERDELL: And do you know what the approximate value of the FTT that was held by Alameda on the FTX exchange prior to November was worth mark to market?

MR. EVERDELL: But you are not certain?

MR. EVERDELL: Third parties -- separate question, Mr. Wang. Did third parties accept FTT as compensation or collateral?

MR. EVERDELL: For example, do you recall that when FTX was launched in 2019, Binance bought a partial stake in the company?

MR. EVERDELL: And in connection with that deal Binance also agreed to acquire 35 million FTT tokens from FTX, right?

MR. EVERDELL: Binance ended up selling their stake in FTT in around 2021?

MR. EVERDELL: I'm sorry. FTX in 2021.

MR. EVERDELL: As part of their compensation for selling their stake in FTX in 2021, Binance accepted FTT tokens?

MR. EVERDELL: If you could take a look at that and see if that refreshes your recollection, Mr. Wang.

MR. EVERDELL: As to whether or not Binance accepted FTT tokens when it sold its stake in FTX.

MR. EVERDELL: We will take that down.

MR. EVERDELL: Mr. Wang, you said you created the fiat@ ledger, is that correct?

MR. EVERDELL: Were there any documents that memorialized the creation of the FTX ledger?

MR. EVERDELL: Now, you created the fiat@ ledger when Alameda first started taking FTX customer deposits into its bank accounts, correct?

MR. EVERDELL: Approximately when was that?

MR. EVERDELL: When you set up the fiat@ account in 2019, as you said, did you have a view at that time as to what Alameda could do with the customer deposits that are reflected in the fiat@ ledger?

MR. EVERDELL: Did you have a view at that point about whether or not Alameda could use the funds?

MR. EVERDELL: So it was your view, in 2019, that what Alameda could do with those funds was either convert them to stablecoins and transfer them to their account on the exchange or hold the money in the bank accounts, is that right?

MR. EVERDELL: So you could keep it in its own bank accounts, and it may have had several bank accounts, right?

MR. EVERDELL: Or you're saying you could have transferred it as stablecoins to its account on the exchange.

MR. EVERDELL: That's the sum total of what you thought it could do with the money.

MR. EVERDELL: What was your view based on?

MR. EVERDELL: So in your experience working for Alameda, did you form this opinion?

MR. EVERDELL: And you had worked for Alameda for two years prior to this, right?

MR. EVERDELL: And I think sort of general understanding of what may happen in the industry is what you said.

MR. EVERDELL: Well, your experience working at Alameda was part of this, right?

MR. EVERDELL: Anything else?

MR. EVERDELL: So that sounds like a conversation about the process of depositing the accounts and converting them into stablecoins?

MR. EVERDELL: To your knowledge, were there any documents or policies in 2019 that defined what Alameda could or could not do with the funds it received?

MR. EVERDELL: You never read the terms of service, correct?

MR. EVERDELL: You don't know what the terms of service says or doesn't say about what Alameda could do with the funds that were deposited in its bank accounts?

MR. EVERDELL: Did your view change at any point?

MR. EVERDELL: Correct.

MR. EVERDELL: You were shown one of Sam's tweets, I think from July 31, 2019, with someone who called himself Bitshine, is that right?

MR. EVERDELL: That was a tweet where Sam told Bitshine that Alameda was treated like every other FTX customer, right?

MR. EVERDELL: If we can put up for the jury what's already in evidence as Government's Exhibit 817.

MR. EVERDELL: Now, before we take a look at that, Mr. Wang, are you familiar with the term front running?

MR. EVERDELL: What is front running?

MR. EVERDELL: What's the issue with doing that?

MR. EVERDELL: For the front-running customer to do that, they need to have awareness of what's happening in the markets to be able to jump ahead, right?

MR. EVERDELL: Was front running a concern at FTX?

MR. EVERDELL: Was it something that FTX tried to prevent?

MR. EVERDELL: Now, Sam was, at least in 2019, when this tweet was sent, he was still -- he owned Alameda, correct?

MR. EVERDELL: And that was a crypto trading firm, right?

MR. EVERDELL: And he was the CEO of FTX, right?

MR. EVERDELL: Which was a crypto exchange?

MR. EVERDELL: If Alameda got inside information about the movement of crypto assets and the prices on FTX, theoretically, it could trade against it, yes?

MR. EVERDELL: To your knowledge, Alameda wasn't given any kind of access like that, correct?

MR. EVERDELL: That is a question about front running, right?

MR. EVERDELL: That is the question that Sam was responding to, right, when he said below that Alameda is -- their account is just like everyone else's, right?

MR. EVERDELL: That is correct, your Honor.

MR. EVERDELL: You testified that you heard Sam make the same sort of representation about Alameda's account on phone calls, right?

MR. EVERDELL: And you said that these calls were with journalists, right?

MR. EVERDELL: And investors?

MR. EVERDELL: Which journalists?

MR. EVERDELL: Which investors?

MR. EVERDELL: When did the calls take place?

MR. EVERDELL: You don't know exactly when these calls took place?

MR. EVERDELL: I think you testified that you were able to overhear these phone calls because you sat near Sam, right?

MR. EVERDELL: But you could only hear his end of the conversation, correct?

MR. EVERDELL: So you don't know what question he was answering when he said Alameda's account was treated like any other, right?

MR. EVERDELL: Mr. Wang, I'm simply referring to the phone calls you just discussed about calls to investors and journalists, right?

MR. EVERDELL: You couldn't hear what was being said on the other end of that line, correct?

MR. EVERDELL: And you didn't speak to those investors yourself, did you?

MR. EVERDELL: In fact, you didn't have any direct contact with investors at all, isn't that right?

MR. EVERDELL: So you recall one instance where you may have spoken to an investor?

MR. EVERDELL: You don't remember the details. Regardless, it was about a technical subject, right?

MR. EVERDELL: Mr. Wang, do you recall being asked questions on direct examination about clawbacks?

MR. EVERDELL: Those are sometimes called socialized losses?

MR. EVERDELL: I think you testified that clawbacks happen when customers are losing money and they are not liquidated fast enough, it can result in losses to other customers on the exchange, right?

MR. EVERDELL: Clawbacks can happen if a customer is losing money, doesn't get liquidated fast enough. Then the other customers have to share the loss.

MR. EVERDELL: Now, FTX tried very hard to prevent clawbacks, isn't that right?

MR. EVERDELL: Well, FTX designed a risk engine and liquidity engine that would try to stop customers from losing money to the point where other customers had to share in the loss?

MR. EVERDELL: And I think you testified that Sam said that clawbacks would not happen, right?

MR. EVERDELL: Do you recall who Sam made those statements to?

MR. EVERDELL: Well, isn't it true that FTX fully disclosed the risks of clawbacks on its website?

MR. EVERDELL: Let me see if you can take a look at DX-964 for identification.

MR. EVERDELL: We can go to the second page, second to last -- actually, the last two full paragraphs.

MR. EVERDELL: I am going to ask if this refreshes your recollection.

MR. EVERDELL: Mr. Wang, you recall that you said a blog post that Sam put out?

MR. EVERDELL: On the subject of clawbacks, right?

MR. EVERDELL: I want you to take a look at this document again. Do you recognize this?

MR. EVERDELL: Is this the blog post that you were referring to?

MR. EVERDELL: Now, taking a look at this and the paragraphs -- now, stepping back, Mr. Wang, isn't it true that Sam disclosed that the clawbacks were a possibility?

MR. EVERDELL: Do you have any recollection about whether in the blog post that you recall Sam disclosed the possibility that clawbacks could happen?

MR. EVERDELL: All right. I'll take it down.

MR. EVERDELL: Let me ask a more general question, Mr. Wang. Isn't it true that when Sam mentioned clawbacks in things like blog posts, he acknowledged the possibility that clawbacks could occur?

MR. EVERDELL: I'll move on.

MR. EVERDELL: Mr. Wang, during your direct testimony you were asked something -- about something called the pointer system. Do you recall that?

MR. EVERDELL: That was Alameda's internal software for tracking Alameda's trading positions and balances across all exchanges, right?

MR. EVERDELL: And not just FTX.

MR. EVERDELL: Do you recall testifying that Sam had pointer pages up on his monitors?

MR. EVERDELL: Isn't it true that pointer has dozens of different pages?

MR. EVERDELL: For example, there were fills pages, right?

MR. EVERDELL: Those tracked Alameda's trades, correct?

MR. EVERDELL: That page did not show Alameda's account balances.

MR. EVERDELL: And then there was something called a transfers page, correct?

MR. EVERDELL: And that tracked Alameda's deposits and withdrawals from the exchanges?

MR. EVERDELL: And that would include all exchanges, not just FTX, right?

MR. EVERDELL: That page also did not show Alameda's account balances, correct?

MR. EVERDELL: And sitting here today, you don't know which pointer pages Mr. Bankman-Fried had open on his screen at any given time, right?

MR. EVERDELL: But you can't be sure, sitting here today?

MR. EVERDELL: Correct.

MR. EVERDELL: And you don't know exactly when you saw this happening?

MR. EVERDELL: Mr. Wang, are you familiar with a document called FTX stats?

MR. EVERDELL: What was FTX stats?

MR. EVERDELL: And that was a document that generally kept track of key metrics and statistics related to the FTX exchange?

MR. EVERDELL: I want to ask you just about a few stats about the FTX exchange, if I could.

MR. EVERDELL: Is it true that, by 2021, FTX had roughly over 15 billion in trades per day?

MR. EVERDELL: Is it also true that during that time FTX generated over 3 million in revenues per day, roughly?

MR. EVERDELL: And isn't it also true that, by 2022, FTX had over 6 million registered users?

MR. EVERDELL: So users might have more than one subaccount, right?

MR. EVERDELL: Is the term registered user different? Does that include subaccounts?

MR. EVERDELL: Isn't it true then, by 2022, FTX actually had over 6 million registered users?

MR. EVERDELL: Would the FTX stat sheet help refresh your recollection?

MR. EVERDELL: If you saw a page that showed total registered users, would that help refresh your recollection?

MR. EVERDELL: 6 million accounts. We will call it that.

MR. EVERDELL: Let me now ask you a few questions about the months after you discovered the fiat@ bug. OK?

MR. EVERDELL: I should say, the months after June 2022, after you fixed the bug.

MR. EVERDELL: After you resolved the bug issue, you and Nishad Singh oversaw a review of the accounting for Alameda's net asset value, is that right?

MR. EVERDELL: All right. But that would include getting a better accounting for the fiat deposits and withdrawals on the Alameda bank accounts, right?

MR. EVERDELL: Right. It had its own bank accounts by that point, right?

MR. EVERDELL: But you had the issue with the fiat@ liability still existing, right?

MR. EVERDELL: And so there was a project to try to incorporate that liability into Alameda's net asset value as it was reflected in FTX.

MR. EVERDELL: All right. So that project took place after you fixed the bug, right?

MR. EVERDELL: Okay. And it was Sam who directed you to do that project, right?

MR. EVERDELL: Okay. And the goal of that project was to make sure that the fiat@ liability would be tracked, right, appropriately?

MR. EVERDELL: And that it would be part of Alameda's balances going forward.

MR. EVERDELL: Okay. Because before that time it was not tracked as part of Alameda's balances.

MR. EVERDELL: Alameda's——sorry. I didn't mean to interrupt.

MR. EVERDELL: Right. Alameda's systems had that.

MR. EVERDELL: Okay. But FTX's systems that tracked the balances were not tracking the fiat@ liability.

MR. EVERDELL: Okay. It was not part of Alameda's balances.

MR. EVERDELL: Okay. Got it. All right. Now are you familiar with the admin user's dashboard?

MR. EVERDELL: That was a screen that could display information about any customer on the FTX exchange, right?

MR. EVERDELL: And that was built for Sam?

MR. EVERDELL: Built for employees who wanted to see account balances on FTX?

MR. EVERDELL: Okay. So if Sam wanted to see the account balances of any customer on the FTX exchange, he could call up that information on the admin user's dashboard, right?

MR. EVERDELL: And he could do that for Alameda, for example.

MR. EVERDELL: And if he could do that, he could see information about the Alameda info@ accounts and the various subaccounts, right?

MR. EVERDELL: Okay. But as you said, the fiat@ liability was not part of Alameda's balances on the admin user's page; is that right?

MR. EVERDELL: Not as of June 2022. Okay. All right.

MR. EVERDELL: Okay. Now you mentioned that it was added later. So that happened after this project that we just spoke about had been completed, right?

MR. EVERDELL: Okay. So even after the project was completed, the fiat@ liability was still——was placed in a subaccount, one of the Alameda subaccounts, right?

MR. EVERDELL: Okay. But it was placed in an account that did not appear in the calculation of Alameda's NAV; is that right?

MR. EVERDELL: Okay. But this is the Korean friend account that you testified about before?

MR. EVERDELL: Okay. So the Korean friend account, if the fiat@ liability was located there, it wouldn't appear on the admin user's dashboard, right?

MR. EVERDELL: Yes. If you pulled up Alameda's accounts while the fiat@ liability was located in that subaccount, it would not appear on the dashboard, if you pulled up Alameda's accounts.

MR. EVERDELL: Okay. Okay. Now you testified that in September of 2022, you took part in a discussion about whether to shut down Alameda. Do you remember that?

MR. EVERDELL: Okay. I think at that time you learned that Bloomberg was going to publish an article about Alameda and FTX sharing office space, right?

MR. EVERDELL: And that there was a concern about that, what the implication of that article might be, right?

MR. EVERDELL: Okay. That you were concerned about what people might react to when they saw that.

MR. EVERDELL: Okay. And so at that point Sam circulated a memo to you and Nishad, right?

MR. EVERDELL: Okay. And I think we saw that in your prior testimony, right?

MR. EVERDELL: This is the document that Sam circulated about Alameda?

MR. EVERDELL: Okay. So in this document, Sam expressed a number of concerns about Alameda; is that right?

MR. EVERDELL: Okay. Now that it's in front of the jurors, let's take a look at this, Mr. Wang. Sam expressed a number of concerns in this document, right?

MR. EVERDELL: Okay. So let's look at the first reason, all right, which is——I'll just circle it here, all right? The first reason was he was concerned about negative press, right, about FTX and Alameda being linked together, right?

MR. EVERDELL: Okay. And he was also concerned about——in No. 2, it says, "The current Alameda leadership is good, but not good enough to be able to trust with such a big operation." Do you see that?

MR. EVERDELL: Okay. And it was Caroline Ellison who was the current CEO of Alameda, right?

MR. EVERDELL: All right. So he was concerned that Caroline wasn't up to the job of——

MR. EVERDELL: ——running Alameda.

MR. EVERDELL: What is your understanding of what bullet No. 2 or reason No. 2 meant?

MR. EVERDELL: Okay. What does it mean to hedge?

MR. EVERDELL: Okay. So I'll use a simple example, right? If I have a bunch of positions, betting that the market is going to go up, I might make some hedge positions that the market's going to go down to kind of offset the risk; is that fair to say?

MR. EVERDELL: Okay. All right. Do you recall any issue with hedging that had happened prior to this memo being circulated?

MR. EVERDELL: Can you describe what that was.

MR. EVERDELL: Okay. So just to sum up, Sam was angry that Alameda did not hedge its positions, correct?

MR. EVERDELL: And that resulted in a loss of money for Alameda, right?

MR. EVERDELL: And it was Caroline Ellison's decision not to hedge, correct?

MR. EVERDELL: Well, if Sam had the ability to make the hedge, he could have put on the hedge that he wanted, right?

MR. EVERDELL: Okay. All right. We can remove the highlighting.

MR. EVERDELL: Okay. Now you see that there are also a number of other reasons that Sam lists as concerns about Alameda. I won't go through them all. Do you see them there?

MR. EVERDELL: Okay. But Sam didn't raise any concerns in this memo about Alameda being unable to pay off its debt, correct?

MR. EVERDELL: Okay. And so Sam recommended shutting Alameda down at this point, right?

MR. EVERDELL: Okay. He was raising the possibility that this is something we should consider.

MR. EVERDELL: Okay. And at the time you didn't think that it should be shut down, right, or wound down?

MR. EVERDELL: Okay. Well, isn't it true that you thought that from a technical perspective, it would take a lot of work to replace Alameda on the exchange, right?

MR. EVERDELL: Among other reasons, it would take a lot of work to replace it as a market maker.

MR. EVERDELL: Well——

MR. EVERDELL: Well, didn't you tell the FBI and the prosecutors that from a technical perspective, it would take a lot of work to replace Alameda as a market maker?

MR. EVERDELL: Okay. Well, let me see if this refreshes your recollection.

MR. EVERDELL: All right. Now if you take a look at that. And just look at the last sentence there, Mr. Wang, see if that refreshes your recollection.

MR. EVERDELL: Just take a look at the document and see if that refreshes your recollection.

MR. EVERDELL: All right. Take it down.

MR. EVERDELL: So you do not recall telling the FBI that from a technical perspective, it would take a lot of work to replace Alameda as a market maker?

MR. EVERDELL: Mr. Wang, I'm simply asking you whether or not you said that to the FBI. I think your answer was you don't specifically recall, right?

MR. EVERDELL: And you testified that on November 6th, Nishad came to your room because he needed you to try to increase the speed of processing customer withdrawals; is that right?

MR. EVERDELL: Because there had been a rapid increase in the volume of customer withdrawals at that point, right?

MR. EVERDELL: And that was because the head of Binance had tweeted that he was going to sell all of his FTT tokens; isn't that right?

MR. EVERDELL: Okay. But he had done that, right?

MR. EVERDELL: And Binance was FTX's main competitor, wasn't it?

MR. EVERDELL: And his tweet triggered effectively a run on the bank at FTX, right?

MR. EVERDELL: Well, it triggered a much larger volume of customer withdrawals than FTX typically experienced; is that right?

MR. EVERDELL: Okay. Well, either way, that was a much larger volume of withdrawals at that time.

MR. EVERDELL: And do you recall the volume of withdrawals that were coming at around——on November 6th when you were asked to help speed up the withdrawal process?

MR. EVERDELL: What was that?

MR. EVERDELL: I'm sorry. The part that was slow? Can you repeat?

MR. EVERDELL: Okay. But my question is: Do you remember roughly how many withdrawals in dollars were happening over the course of, say, November 6th?

MR. EVERDELL: Understood, your Honor. I'm asking about the former. I'm trying to get a sense of the volume of withdrawals off the exchange of all types of withdrawals; not just dollar withdrawals, but denominated in dollars.

MR. EVERDELL: An hour. So do you know what sort of typical volume was prior to that date of withdrawal volume per hour?

MR. EVERDELL: So it was multiple above that that you were experiencing on the 6th.

MR. EVERDELL: Okay. Now at that point Sam asked you to calculate how many additional funds were needed to be deposited on the exchange if all customers withdrew their funds, right?

MR. EVERDELL: Okay. And you did that calculation, right?

MR. EVERDELL: And I think at first you came up with 0, roughly 0.

MR. EVERDELL: But you knew that was not correct, right?

MR. EVERDELL: Because you knew that Alameda owed roughly $8 billion to FTX for the fiat liability.

MR. EVERDELL: And then Sam asked if you were including that Korean friend account; is that right?

MR. EVERDELL: Okay. That, at the time, wasn't an account that you were familiar with, right?

MR. EVERDELL: When you did include it, you saw a different balance, right?

MR. EVERDELL: That's when you saw roughly negative 8 billion, right?

MR. EVERDELL: Now to be clear, what surprised you was not that there was a negative $8 billion liability, right, or that the liability existed?

MR. EVERDELL: You had known that there was a debt there for several months, right?

MR. EVERDELL: What surprised you is simply that the fiat@ liability had been placed in this other Alameda subaccount.

MR. EVERDELL: In this other account, I should say.

MR. EVERDELL: Okay. Now this being in a different account, I think you said it didn't appear on the admin user's dashboard, right?

MR. EVERDELL: Right. So you don't know why it was relocated there, right?

MR. EVERDELL: Well, you don't know how long Sam——if Sam had been aware of the transfer to this account.

MR. EVERDELL: Okay. You don't know if and when Sam found out about the fact that the liability had been transferred to this account, do you?

MR. EVERDELL: Okay. And I think that day Sam put out some tweets; is that right?

MR. EVERDELL: Okay. And you were shown some of those in your direct examination?

MR. EVERDELL: Now I think you testified on direct that, well, first, you didn't see these tweets when they came out, right?

MR. EVERDELL: You saw them after the fact.

MR. EVERDELL: Okay. Couple days after the fact?

MR. EVERDELL: But you didn't see them when they were posted.

MR. EVERDELL: Now you said, I think on direct, that you thought this tweet that assets are fine was incorrect, right?

MR. EVERDELL: And I think you said it's because your view, FTX didn't have enough assets for the customer withdrawals, right?

MR. EVERDELL: Now, Mr. Wang, are you familiar with the difference between "solvency" and "liquidity"?

MR. EVERDELL: Well, "solvency" roughly means that you have enough assets to cover your liabilities, right?

MR. EVERDELL: "Liquidity" refers to how quickly you can convert an asset to cash, right?

MR. EVERDELL: So for example, to use a simple example, if I have a thousand dollars in the bank in cash and I owe $10 to my friend, I'm solvent, right?

MR. EVERDELL: Okay. Because my assets, the thousand dollars I have in the bank, can cover my liabilities, which is the $10 I owe my friend.

MR. EVERDELL: And I'm also liquid, right?

MR. EVERDELL: Because my assets are in cash.

MR. EVERDELL: And I can pay my friend off right away if I need to.

MR. EVERDELL: Okay. But let's say the only asset I own is a $100,000 house and I have debts of 50,000, okay? I'm still solvent, right?

MR. EVERDELL: Because my assets are still well above my liabilities.

MR. EVERDELL: But I'm just not liquid, right?

MR. EVERDELL: Because to pay off my debts, I'd have to sell my house, right?

MR. EVERDELL: And that could take awhile.

MR. EVERDELL: So Sam's tweet here refers to assets, correct?

MR. EVERDELL: Assets. Now isn't it true that when you first talked to the government about this tweet, you said you thought it was true because Sam was careful to say that FTX was solvent, it just wasn't liquid.

MR. EVERDELL: Okay. You——

MR. EVERDELL: Well——

MR. EVERDELL: All right. You said it was true but misleading. Isn't it true that you simply said to the government on November 17th, your first proffer, that it was true because it was——he was careful to say that FTX was solvent but not liquid?

MR. EVERDELL: Okay. Well, isn't it true that you also met with the government a few days later, on November 29th?

MR. EVERDELL: All right. And at that point you also said that it was true because the announcement was FTX was solvent and had——Alameda had collateral, including FTT and Serum?