SBF Asks Gary Wang to Create Secret Backdoor; $65 Billion Stolen

SBF Asks Gary Wang to Create Secret Backdoor; $65 Billion Stolen

• FTX’s attorney stated that SBF asked the FTX co-founder to create a secret backdoor to enable Alameda to acquire FTX customers’ funds.
• Almost $65 billion of customers’ funds were transferred from FTX to Alameda without their permission.
• Gary Wang confessed his guilt and has been cooperative with the investigation.

Reportedly, Andrew Dietderich, an FTX attorney reported in Delaware bankruptcy court that the disreputed Sam Bankman-Fried, the former CEO of the collapsed crypto exchange FTX, told Gary Wang, the co-founder of FTX to create a “secret” backdoor to enable Alameda Research to borrow $65 billion client money from FTX.

On Wednesday, the attorney told that Gary Wang created a secret line of credit using customer funds from FTX to Alameda:

Mr. Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent.

Significantly, Dietderich revealed the “size of the line of credit”- $65 billion. He added that the backdoor was a method by which Alameda had access to the FTX customers’ funds “without their permission.

Since SBF was accused of and imprisoned for accumulating illicit funds, more and more revelations have been coming up.

In December 2022, The Commodity Futures Trading Commission (CFTC) put forward a similar allegation when it charged Wang, though the details of the amount weren’t revealed:

These critical code features and structural exceptions allowed Alameda to secretly and recklessly siphon FTX customer assets from the FTX platform.

Notably, Wang and the CEO of Alameda Research, Caroline Ellison have been cooperating with the investigation, confessing their part in SBF’s fraud.

Similarly, in November, Reuters reported that SBF has secretly transferred about $10 billion in funds to Alameda Research.

However, SBF wrote while awaiting the trial that he hasn’t stolen any funds. He added that nearly all of his funds were and still are “utilizable to backstop FTX customers”.

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