FTX Co-Founder Reveals Alameda's Billions in Borrowed Customer Funds, Unlimited Overdrafts

FTX co-founder Gary Wang testified that FTX gave its associated firm Alameda special privileges like unlimited negative balances.

Alameda borrowed billions from FTX customer funds to cover its losses, unknown to customers.

In September 2022, Sam Bankman-Fried suggested shutting down Alameda due to its debts and bad optics.

Wang testified the real reason for pausing withdrawals in November was that FTX ran out of funds, not due to banks being closed.

Wang is cooperating with prosecutors in exchange for a recommendation of reduced prison sentence.