Benzinga - Adam Yedidia, a significant witness in the ongoing trial of Sam Bankman-Fried, the ex-CEO of FTX, has testified that a bug in the FTX system led to an $8 billion shortfall for cryptocurrency hedge fund Alameda Research.
As reported by Business Insider on Wednesday, Yedidia, a former developer at FTX, discovered a bug in his code that had severe financial implications for Alameda Research. The erroneous code, intended to automate the deposit process at FTX, resulted in incorrect figures in the internal ledger of Alameda Research.
See Also: Sam Bankman-Fried’s High-Profile Crypto Trial Begins: Meet The 12 People Deciding His Fate
Yedidia testified that Alameda Research had $500 million more in liabilities than initially perceived. This figure had grown to a staggering $8 billion by the time the bug was rectified, six months post-discovery.
Yedidia approached Bankman-Fried, who was also in control of Alameda Research, with his concerns about the financial discrepancy. According to the testimony, Bankman-Fried acknowledged the issue and estimated that it would take between six months to three years to rectify.
When Yedidia asked if everything was okay, Bankman-Fried reportedly said, “We were bulletproof last year, but we’re not bulletproof this year.”
FTX collapsed in November 2022 after the public became aware of the unusual financial exposure between the exchange and Alameda Research. The fallout led to criminal charges against Bankman-Fried, who faces multiple counts including alleged wire fraud and conspiracy to commit securities fraud.
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