Adam Yedidia, FTX developer and former MIT roommate to Sam Bankman-Fried, former Chief Executive Officer (CEO) of the defunct cryptocurrency exchange has testified that there was a bug in Alameda Research’s codes.
Yedidia Confirmed the $8B Deficit
It’s the third day of SBF’s long-awaited trial and according to an Inner City Press report, the former roommate took the stand to establish the connection between FTX and Alameda Research. This information is crucial to the fraud accusations levied against Bankman-Fried following the implosion of the crypto exchange.
Yedidia mentioned that he pointed out a critical bug in the FTX code which affected Alameda’s liability. This bug allegedly prevented Alameda’s liabilities from decreasing and this led to a financial error in the company’s balance sheet. At the same time, the developer highlighted that he fixed the bug about six months after it was discovered.
When Yedidia first found out about the bug, it was said to be an error featuring as much as a $500 million deficit. However, this deficit turned out to be a wide hole of $8 billion.
Per the Inner City Press post on X, the FTX developer claimed to have shared this information with Bankman-Fried via Signal, an end-to-end encrypted messaging app. SBF preferred this platform because of its auto-delete feature, which he believed would be sufficient to keep authorities away from the business’s financial dealings.
Later, the former roommate confronted him near a “paddle tennis court” in the Bahamas about the huge hole to which the 31-year-old entrepreneur reassured him of a potential solution.
SBF and Investments in Secret Projects
One of the questions likely to be running through the minds of crypto ecosystem members following the case is: where did the $8 billion go?
It is worth noting that SBF had some projects going on underground that were not reflected on the company’s balance sheet. Crypto news platform The Block claimed that its ex-CEO Michael McCaffrey, received three loans to the tune of $43 million from Bankman-Fried.
This revelation eventually led to the resignation of McCaffrey from the news firm. Bobby Moran, the new leader of the firm confirmed that no one from The Block was privy of the arrangement, a comment that underscores the many other investments from the embattled FTX founder.
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