Sam Bankman-Fried was aware of FTX’s vulnerabilities months before its collapse, according to testimony from a former roommate and FTX employee, Adam Yedidia. The conversation between them reportedly took place in June 2022 at the Albany resort, where they resided in a $35 million penthouse. Yedidia expressed concerns about Alameda, Bankman-Fried’s private trading firm, owing $8 billion to FTX customers.
As per media reports based on ongoing trial, Bankman-Fried allegedly acknowledged the change in circumstances, stating, “We were bulletproof last year, but we’re not bulletproof anymore.”
Yedidia, testifying under immunity, suggested that Bankman-Fried was aware of the flow of FTX customer funds to Alameda long before FTX’s November 2022 collapse. Yedidia, who joined FTX as a developer in early 2021, explained that he observed a meeting in June 2022 where a “full accounting” of both companies’ financial situation occurred.
Following this, Yedidia was instructed to fix a bug in FTX’s code that had overstated Alameda’s obligation to FTX customers, revealing an $8 billion liability. Despite raising concerns, Yedidia trusted Bankman-Fried to handle the situation.
As the crisis unfolded in November 2022, Yedidia stayed supportive until learning that Alameda had used FTX customer deposits to repay its loans, leading to his resignation. The court also heard from Matt Huang, co-founder of Paradigm, a major venture capital investor in crypto, who invested $278 million in FTX.
Huang testified that he was assured Alameda had no special access to FTX. The trial continues with further testimony from Gary Wang, co-founder of FTX.
