During the ongoing trial of Sam Bankman-Fried (SBF), co-founder of FTX, Gary Wang, another co-founder, has made a significant claim. In his testimony before a New York Jury last Friday, Wang asserted that SBF had misappropriated customer funds right from the inception of this exchange. According to Wang, Bankman-Fried had authorized the illicit utilization of customers’ funds and assets to cover financial shortfalls at an associated hedge fund, Alameda Research, from the very early days of the exchange.
On Wang’s second day of testimony, he revealed that the losses incurred at Alameda Research had grown to such an extent that concealing them became impossible. He referred to SBF’s infamous tweet just before the exchange’s collapse, stating that “FTX was not fine.” The prosecution in the case alleges that SBF pilfered millions from customers during and after the FTX collapse, using the funds to finance his extravagant lifestyle and political campaigns.
Gary Wang, who served as FTX’s chief technology officer, is among several executives who have agreed to provide testimony against Bankman-Fried in exchange for leniency in their own criminal cases. As part of his agreement with prosecutors, Wang has pleaded guilty to wire fraud, securities fraud, and commodities fraud. In his recent testimony, Wang informed the jury that, at SBF’s direction, he implemented code within this exchange’s operations that granted Alameda Research the capability to make nearly unlimited withdrawals from FTX. Alameda Research had a line of credit of up to $65 billion within FTX.
Wang added, “It withdrew more funds than it had on the exchange,” emphasizing that the money withdrawn “belonged to FTX customers.” The losses incurred by Alameda had escalated to as much as $14 billion before the collapse of this exchange, and Wang expressed doubt about Alameda’s ability to repay this colossal amount.
FTX-Linked Hack Triggers Temporary Suspension of THORSwap Platform
A developer from THORSwap conveyed the team’s strong stance against any form of criminal activity. Following this development, the individual known as the “FTX Exploiter” began transferring funds into Threshold Network’s tBTC tokens. THORSwap exchange, on Friday, announced its transition into a “maintenance” mode as a response to a sequence of transactions that were illicitly linked to the platform over the past few days.
These transactions included several originating from the infamous “FTX Exploiter” wallet, which siphoned off funds from Sam Bankman-Fried’s FTX exchange in the aftermath of its bankruptcy last year. According to blockchain investigator Lookonchain, the exploiter commenced swapping ether (ETH) into Threshold Network’s tBTC tokens early on Friday. tBTC represents a bridged version of bitcoin (BTC).
“Yesterday, following a careful evaluation of the situation and consultation with advisors, legal counsel and law enforcement, the decision was made to temporarily transition the THORSwap interface into maintenance mode,” THORSwap developers said in a tweet.
This action effectively puts a halt to trading operations. Nevertheless, functionalities such as lending, borrowing, and staking remain fully operational.
THORSwap operates on the THORChain network, enabling users to freely exchange tokens across different blockchains.
In November 2022, shortly after FTX and its affiliated companies declared bankruptcy, an unidentified entity successfully emptied numerous wallets, amassing a total of up to $600 million.
Just last week, the individual responsible for the hack, whose identity remains undisclosed to this day, managed to transfer over 15,000 ether through various platforms, including THORSwap. The sudden movement of these funds, occurring on the eve of Sam Bankman-Fried’s criminal trial this week in a federal court in New York, has deepened one of the ongoing mysteries surrounding the collapse of the exchange last year.