Testimony Under Fire
On October 5, 2023, Adam Yedidia, an early FTX employee and former college roommate of Sam Bankman-Fried, continued his pivotal testimony against the fallen crypto kingpin. Speaking with immunity for the prosecution, Yedidia spilled the beans on his inside experiences at the crypto exchange now infamous for its frailty.
Life in the House
Yedidia described life at FTX as a mix of hard work and peculiar living arrangements, sharing a luxury apartment at Albany Resort in the Bahamas with nine other “people of the house.” This was basically a cash cow penthouse for the tech elite, who were living La Vida Loca while managing the financial chaos below. He reported to Nishad Singh, the ex-director of engineering, and informally to Gary Wang and the man of the hour, Bankman-Fried himself.
Behind the Scenes of Customer Funds
Among the juicier nuggets from Yedidia’s testimony was the revelation that customer deposits, instead of being safely stowed in an FTX bank account, were funneled to North Dimension Inc.—a company controlled by Alameda Research. Talk about creative accounting! Customers were kept in the dark, blissfully unaware of where their money was really headed.
The Code That Broke the Bank
Yedidia also recounted how he had a hand in writing the automation code for customer deposits and withdrawals. Unfortunately, a bug caused major discrepancies which inflated the supposed liabilities of Alameda Research to the tune of $500 million. Not exactly a minor coding error! When he finally got around to fixing the issue six months later, the supposed financial liabilities of Alameda had dramatically dropped from $16 billion to $8 billion. Clearly, someone needs to have a serious chat with QA.
“Bulletproof” Assurances
Despite the financial mess, Bankman-Fried reassured Yedidia that the company would be “bulletproof” again in no time. With a timeline of six months to three years, it felt like FTX was selling a used car rather than a financial product. “Bulletproof” must be some kind of crypto jargon for “don’t panic yet,” because panic was what everyone was feeling as the trial unfolded.
Communication and Cover-ups
In a twist that could rival a plot in a sitcom, Yedidia revealed the crew used the Signal app to communicate, ensuring all messages would self-destruct before the authorities could get their hands on the evidence. Because nothing says trust in your employer like making sure no one can trace your conversations. Bankman-Fried likely viewed preserving evidence as “all downside.” Guess he didn’t watch enough detective shows to know how that usually ends.
