
Adam Yedidia, an important witness in the ongoing trial of Sam Bankman-Fried, the ex-CEO of FTX, has testified that a bug in the FTX system caused an $8 billion shortfall for cryptocurrency hedge fund Alameda Research.
The former developer at FTX, Yedidia, discovered a bugs in his code that had substantial financial implications for Alameda Research. The erroneous code, intended to automate the deposit process at FTX, resulted in inaccurate figures in the internal ledger of Alameda Research.
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Yedidia testified that Alameda Research had $500 million more in liabilities than originally anticipated. By the time the bug was rectified, the company had grown to a staggering $8 billion, six months after discovery.
Bankman-Fried asked Yedidia, who was in charge of Alameda Research, with his concerns about the financial discrepancy. Bankman-Fried admitted the issue and predicted that it would take between six months to three years to rectify.
In November 2022, the public became aware of the unusual financial exposure between the exchange and Alameda Research, which led to the collapse of FTX. Bankman-Fried was charged with multiple counts of wire fraud and conspiracy to commit securities fraud.