The high-profile criminal trial of Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, took an intense turn on its second day. As a pivotal witness for the prosecution, Adam Yedidia, a former FTX software developer and close friend of Bankman-Fried, testified. Yedidia’s testimony shed light on their relationship and the inner workings of FTX.
Adam Yedidia revealed his extensive history with Sam Bankman-Fried, starting as roommates during their time at MIT. Yedidia briefly worked at Alameda Research in 2017 before joining FTX as a developer in January 2021.
Their connection went even further, as Yedidia disclosed that he had resided with Bankman-Fried and seven other close associates in a luxurious $35 million Bahamian penthouse apartment from October 2021 until November 2022.
However, Yedidia’s testimony took a dramatic turn as he mentioned that he had severed ties with Bankman-Fried since November 2022. His decision to part ways with his former friend was driven by his realization that FTX had allegedly used customer deposits to repay outstanding loans, which he found ethically unacceptable. Yedidia promptly resigned from his position at FTX following this revelation.
What makes Adam Yedidia’s testimony particularly significant is his immunity grant from the government. Unlike other former associates of Sam Bankman-Fried, such as Nishad Singh and Caroline Ellison, Yedidia has not been charged with any crimes. He testified voluntarily and without the incentive of a plea deal.
This immunity grant shields him from potential criminal charges based on his testimony. He expressed concerns that his role at FTX might have indirectly contributed to activities that could be considered criminal.
Insights into FTX Operations
Yedidia’s testimony also unveiled some insights into FTX’s operations. He disclosed that some U.S. institutional investors were permitted to trade on FTX.com through their offshore subsidiaries. This arrangement was likely designed to establish the jurisdiction of the U.S. court in the case, adding another layer of complexity to the trial.
Prior Witness Testimony
Before Yedidia’s testimony, the court heard from Marc Antoine Julliard, a customer of FTX. Julliard described his experience using the platform and how various advertisements influenced his decision to trade cryptocurrencies on FTX. A notable moment in his testimony occurred when he acknowledged the volatility and risks associated with cryptocurrencies. However, on redirect, he clarified that while he understood crypto price fluctuations, he had never considered it a risk that FTX would mishandle his funds.
The day began with the completion of the jury selection process. Among the selected jurors are individuals from diverse backgrounds, including a pediatric nurse and a MetroNorth train conductor.
As the trial unfolds, Adam Yedidia’s testimony stands as a pivotal moment, offering a glimpse into the inner workings of FTX and raising critical questions about its operations and ethical practices.