Bitcoin News and Finance

Bankman-Fried’s House of Cards? FTX Co-Founder Gary Wang Spills the Beans on Alleged Misuse of Client Funds

On Friday, FTX’s co-founder, Gary Wang, delivered a riveting testimony to federal prosecutors, alleging that CEO Sam Bankman-Fried covertly diverted billions from customer accounts to fuel trades for his hedge fund, Alameda Research. Wang detailed how Bankman-Fried allegedly instructed him to devise a specialized trading tool, enabling Alameda to overdraw its account, tapping into FTX clients’ funds without their knowledge.

Wang’s Second Day of Testimony Reveals SBF’s Alleged Misappropriation of Client Funds

Formerly FTX’s chief technology officer, Zixiao (Gary) Wang recounted how he, alongside developer Nishad Singh, engineered the “allow negative” feature, granting Alameda the ability to trade on unbacked credit. Contrary to the narrative presented by “The Big Short” author Michael Lewis, Wang painted a grim picture of FTX’s internal operations, emphasizing:

FTX was not fine. Assets were not fine.

This gripping testimony was streamed on the X social media platform (formally Twitter) by journalist Matthew Russell Lee of Inner City Press, with additional accounts emerging from the courthouse. Wang disclosed that while Bankman-Fried justified the tool’s creation for Alameda’s role as the primary market maker and for FTT token trades, its application was far more expansive.

This concealed mechanism allowed Alameda to overdraw up to $100 million from customer funds. Wang’s investigation in early 2020 revealed Alameda’s staggering negative balance of over $200 million, even as FTX reported revenues of a mere $150 million. Wang emphasized that the funds Alameda utilized were sourced directly from FTX’s clientele.

Russell Lee’s summary shows Wang accused Bankman-Fried of public deception, assuring clients of the safety of their funds while permitting Alameda’s deficit to skyrocket to a staggering negative $20 billion. This discrepancy was highlighted in court through a revealing spreadsheet presented by prosecutors. In the end, Wang emphasized that Alameda boasted a staggering $65 billion credit line.

After an inadvertent disclosure of Alameda’s colossal debt, Wang shared how Bankman-Fried orchestrated repayments to specific lenders, such as Genesis Trading. Contrary to Bankman-Fried’s public denials on platforms like Twitter and in media interactions, Wang asserted that these repayments were sourced from FTX’s user base.

Wang narrated a tense period where, amidst the unfolding crisis, he joined Bankman-Fried and associates in the Bahamas. Post the bankruptcy declaration, Bankman-Fried allegedly directed Wang to halt U.S. transactions and liaise with the more accommodating Bahamian regulators.

Wang made a swift exit from the Caribbean on November 16, collaborating with U.S. authorities the very next day. Wang expressed his aspiration for “no prison time” following his collaboration with U.S. law enforcement officials.

What do you think about Gary Wang’s second day of testimony? Share your thoughts and opinions about this subject in the comments section below.

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Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

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Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r

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