Sam Bankman-Fried stole customer funds from the beginning of FTX, exchange's co-founder tells jury

Sam Bankman-Fried authorised the illegal use of FTX customers’ funds and assets, FTX’s co-founder Gary Wang told a New York jury.

Sam Bankman-Fried authorised the illegal use of FTX customers' funds and assets to plug financial gaps at an affiliated hedge fund from the exchange's earliest days, FTX's co-founder Gary Wang told a New York jury on Friday, as prosecutors pressed their case that Bankman-Fried was the mastermind behind one of the biggest frauds in U.S. history.

Eventually, the losses at the hedge fund, Alameda Research, became so large that there was no way to hide them any longer, Wang said in his second day of testimony.

“FTX was not fine,” Wang said, referring to the now-infamous tweet that Bankman-Fried wrote only a few days before the exchange filed for bankruptcy in November 2022.

Prosecutors allege that Bankman-Fried, 31, stole billions of dollars from investors and customers in order to fund a lavish lifestyle in The Bahamas and buy the influence of politicians, celebrities and the public.

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Wang was FTX's chief technology officer and is part of what has been referred to as the “inner circle” of FTX executives who have agreed to testify against Bankman-Fried in exchange for leniency in their own criminal cases. He is expected to finish his testimony Tuesday. Wang has pleaded guilty to wire fraud, securities and commodities fraud as part of his agreement with prosecutors.

Prosecutors hope to have Caroline Ellison, the former CEO of Alameda and Bankman-Fried's ex-girlfriend, take the stand Tuesday.