SBF Trial Witness: Glitch at FTX Overstated Alameda's Debts by $8B

NEW YORK – A software bug that resulted from the unusual way FTX handled customer deposits overstated how much its sister company Alameda owed the exchange’s customers by $8 billion, a witness in Sam Bankman-Fried’s trial said Wednesday.

Prosecutors zoomed in on a conversation that Yedidia and Bankman-Fried had on a tennis court. Yedidia had just patched the accounting bug in mid-June, he said, which incorrectly said Alameda owed FTX customers $16 billion. In doing so, he discovered there was still an $8 billion debt, and “was concerned.” Bankman-Fried told him “we were bulletproof last year, but we’re not bulletproof this year.”

Yedidia took the stand again on day three of Bankman-Fried’s trial. The onetime FTX chief faces fraud and conspiracy charges stemming from the collapse of his crypto empire, which prosecutors said was a “house of cards” during opening arguments on Tuesday. “I learned that Alameda Research had used customer – FTX customer deposits to pay back its loan to creditors,” he said. Asked what he did then, Yedidia responded: “I resigned.”Bankman-Fried walked in just before 9:30 a.m. nodding at people in the gallery, seemingly greeting them with a shy smile before searching for his parents, who were seated on the right side in the second row.

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