Sex, Signal messages and sabotage: SBF’s top execs and Bahamas roommates tell all in court
Witness Adam Yedidia answers questions during Sam Bankman-Fried fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, October 5, 2023, in this courtroom sketch.
Jane Rosenberg | Reuters
Two of Sam Bankman-Fried’s former friends from MIT, who also worked at crypto exchange FTX while living with the company’s founder in the Bahamas, took the stand in a Manhattan courtroom this week to testify against their former classmate, confidant, and boss — a man who allegedly ran a crypto empire that defrauded thousands of customers out of billions of dollars.
Gary Wang, the lesser-known co-founder of FTX, was asked by Assistant U.S. Attorney Nicolas Roos on Thursday, “Did you commit financial crimes while working at FTX?”
“Yes,” responded Wang. He said that his crimes, including wire and commodities fraud, were carried out with the help of Bankman-Fried, FTX ex-engineering head Nishad Singh and Caroline Ellison, who ran sister hedge fund Alameda Research and had been Bankman-Fried’s girlfriend.
“Mr. Wang, do you see any of the people you committed those crimes with in the courtroom today?” Roos continued.
Wang, dressed in an oversized and wrinkled suit with a red tie and glasses, awkwardly stood up and looked around the courtroom before responding, “Yes.”
“Who do you see?” asked Roos.
“Sam Bankman-Fried,” he said.
The trial, set to last six weeks, will resume on Tuesday with key testimony expected from Ellison, who is considered the prosecution’s star witness, having already pleaded guilty to multiple charges. Bankman-Fried faces seven federal charges, including wire fraud, securities fraud and money laundering, that could put him in prison for the rest of his life.
Thus far, Bankman-Fried, 31, has remained mostly quiet in court intently listening to witnesses and at times writing notes to his attorneys. But as Wang testified against him, Bankman-Fried looked visibility upset, shifting his gaze from his former friend to the ground, and at one point putting his head in his hands.
Sam Bankman-Fried listens as Assistant U.S. Attorney Nicolas Roos questions Gary Wang during Bankman-Fried’s fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 6, 2023, in this courtroom sketch.
Jane Rosenberg | Reuters
Wang, 30, was technology chief for FTX, which spiraled into bankruptcy in November. He spoke so fast that U.S. District Judge Lewis Kaplan and the prosecutor both stopped him at points to ask that he slow his pace.
Much of Wang’s testimony on Friday focused on the final days at FTX before the entire operation imploded, including reports in the media detailing Alameda’s business practices and its troubling ties to FTX.
Wang said that in response to the reporting an emergency meeting was called between Bankman-Fried, Wang and Singh, to discuss shutting down Alameda. He said they ultimately decided against such a move, because he and Bankman-Fried were aware that Alameda had no way to repay the roughly $14 billion hole in its books.
Prosecutors took the jury through a series of tweets, beginning on Nov. 7. Posts came from the company blaming bank hours for slow withdrawals, while Bankman-Fried tweeted from his personal account, assuring customers that all was fine.
“FTX was not fine and assets were not fine,” Wang testified.
On Nov. 12, after FTX declared bankruptcy, Bankman-Fried asked Wang to drive with him to the Bahamas Securities Commission for a meeting. On the drive, Bankman-Fried told Wang to transfer assets to Bahamian liquidators because he believed they would allow him to maintain control of the company. Wang said he wasn’t in the meeting with the securities authority, though Bankman-Fried’s dad was present.
Wang said he returned to the U.S. and met with prosecutors the next day. He faces up to 50 years in prison when he faces a judge for sentencing following this trial. He told jurors he signed a six-page cooperation agreement that requires him to meet with prosecutors, answer their questions truthfully and turn over evidence.
Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, is seen during a hearing as a U.S judge revoked his bail, at a courthouse in New York, U.S., August 11, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
$65 billion line of credit
For months, Bankman-Fried has known that Wang and Ellison, who were integral members of his personal and professional inner circles, had turned on him. Both pleaded guilty in December and have since been cooperating with the U.S. attorney’s office in Manhattan.
Wang’s testimony, which stretched into Friday, was given under a cooperation agreement with the government. Ellison is expected to take the stand under a similar arrangement.
U.S. District Judge Lewis Kaplan presides as Gary Wang testifies during the fraud trial of Sam Bankman-Fried over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 6, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Born in China, Wang moved to the U.S. at age 7, and grew up in Minnesota before going to the Massachusetts Institute of Technology to study math and computer science. He worked at Google after college.
Wang, who first met Bankman-Fried during high school at a summer camp, owned 10% of Alameda, while his boss owned the other 90%. Wang told the court about the advantages that Alameda received by having code baked into FTX’s software that allowed special access to the crypto exchange. Those privileges ultimately resulted in Alameda owing FTX $8 billion worth of customer deposits.
“We gave special privileges on FTX that gave unlimited withdrawals on the platform to Alameda,” Wang said. Alameda was allowed to withdraw and transfer those funds and had a $65 billion line of credit.
“When customers deposited USD, it went to Alameda,” he said. “It existed in the computer code. Alameda could have negative balances and unlimited withdrawals.”
That “bug” in the code was written by Nishad Singh, who was FTX’s director of engineering, and reviewed by Wang. Bankman-Fried was calling the shots, Wang said.
Wang also told the court about a $1 million personal loan he received and a $200 million to $300 million loan in his name from Alameda that was never deposited into his account, but rather was used to make investments into other companies on behalf of FTX. That was all done by Bankman-Fried, he testified.
In early 2020, Wang said he discovered for the first time Alameda’s negative balance exceeded FTX’s revenue, an indication that Alameda was taking customer funds. Wang said he brought this to Bankman-Fried’s attention several times.
In late 2021, Wang discovered Alameda had withdrawn $3 billion from its $65 billion line of credit.
Wang’s compensation was a base salary of $200,000 per year plus stock. He owned roughly 17% of FTX.
Even though they were co-founders, “ultimately it was Sam’s decision to make” when there were disagreements, he said.
Assistant United States Attorney Nicolas Roos questions Gary Wang during Sam Bankman-Fried’s fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 6, 2023, in this courtroom sketch.
Jane Rosenberg | Reuters
An $8 billion bug
Adam Yedidia, who was the prosecution’s second witness on Wednesday, continued his testimony on Thursday. Yedidia met Bankman-Fried in college at MIT, and the pair remained close friends.
Yedidia, assuming a robotic posture on the stand, worked out of FTX’s Hong Kong office from January to October of 2021 and then in the Bahamas until last year’s collapse. In his testimony, he referred to a group Signal thread called “People of the House,” referring to Bankman-Fried’s $35 million penthouse, where many employees lived.
Exhibit from the prosecution shows Signal thread called “People of the House,” referring to Bankman-Fried’s $35 million penthouse, where many employees lived.
Source: SDNY
In terms of who was paying the rent, Yedidia recalled Bankman-Fried saying he “assumed it’s just Alameda paying for it in the end.”
Yedidia said Bankman-Fried had told him, before he began working in the Bahamas in 2019, that he and Ellison had sex. Bankman-Fried asked Yedidia if it was a good idea for them to date, to which Yedidia said no. Bankman-Fried responded by saying he was expecting that answer.
One of Yedidia’s responsibilities was fixing the bug in the code that gave Alameda preferential treatment. In June 2022, he submitted a report to Bankman-Fried on Signal that showed $8 billion in customer money held in an internal database tracking the cash wired to an Alameda account called “fiat at ftx.com” was missing.
Yedidia said he and Bankman-Fried spoke about it at the pickleball court at the resort in Nassau, Bahamas. He asked his boss if things were OK. He was concerned because it “seemed like a lot of money” from FTX customers was at risk.
“Sam said, we were bulletproof last year. We aren’t bulletproof this year,” Yedidia testified.
Yedidia said he asked when they would be bulletproof again.
Bankman-Fried said he wasn’t sure, but it may be six months to three years. Yedidia said Bankman-Fried appeared “worried or nervous,” which he said was atypical. Still, Yedidia said he trusted Bankman-Fried and Ellison to “handle the situation.”
On cross-examination, Christian Everdell, Bankman-Fried’s attorney, focused on how Yedidia was the one responsible for developing and reviewing the code.
He asked about the long hours employees worked and Yedidia’s concern for Wang being near burnout. That resulted in Yedidia instituting a rule to not wake Wang at night for bug fixes because he needed sleep.
Everdell also drilled Yedidia on his high level of compensation in his less than two years at FTX. His base salary was between $175,000 and $200,000, but he received multiple bonuses of more than $12 million in cash and company equity.
Yedidia said he’s now teaching math — geometry and algebra — at a high school. He invested most of the millions he earned as bonuses back into FTX, and his equity stake is now worthless.
As FTX was failing, Yedidia said he was by Bankman-Fried’s side. He highlighted a Signal exchange in November 2022, during which he wrote, “I love you Sam. I’m not going anywhere.” He said he wrote the message because so many people had left.
When asked what changed, Yedidia said he learned that FTX customer deposits had been used to pay loans to creditors. He said Alameda’s actions seemed “flagrantly wrong.”
Yedidia’s testimony ended on a fiery note, which was later struck from the record. He was asked why he had lost faith in FTX and resigned.
“FTX defrauded all its customers,” he said.
Matt Huang, co-founder of Paradigm Operations LP, right, arrives at court in New York, US, on Thursday, Oct. 5, 2023. Former FTX Co-Founder Sam Bankman-Fried is charged with seven counts of fraud and money laundering following the collapse of his cryptocurrency empire last year. Photographer: Yuki Iwamura/Bloomberg via Getty Images
Yuki Iwamura | Bloomberg | Getty Images
Investment to zero
The third witness to take the stand was Matt Huang, co-founder and managing partner of Paradigm, a crypto venture capital firm that invested over $275 million in FTX. That stake was wiped out.
Huang testified about his firm’s due diligence on FTX, and he told the court that Bankman-Fried assured him that funds would be used for FTX and not Alameda. Additionally, he was promised that Alameda had no preferential treatment on the FTX platform, even though the hedge fund was one of its top traders.
Huang said he was concerned about FTX’s lack of a board of directors, but he eventually invested anyway. During cross-examination, Huang said Paradigm pressed Bankman-Fried on the board issue and was told he didn’t want investors as directors but he did plan on having a board with experts.
— CNBC’s Dawn Giel contributed to this report.
Xpeng has officially launched its new G7 electric SUV in China, entering the fiercely competitive electric crossover market with a starting price of just 195,800 yuan ($27,325 USD). The G7 is positioned squarely to compete with the Tesla Model Y and the newly unveiled Xiaomi YU7.
It is priced significantly more aggressively than the YU7, which shook up the industry just last week.
The G7, Xpeng’s seventh model, offers an attractive balance of performance, technology, and value, with an emphasis on the latter.
Like Lei Jun with the launch of the YU7 last week, He Xiaopeng was not shy about positioning the G7 against the best-selling Tesla Model Y.
He compared the specs and pricing with the leading premium crossover. Like Jun, he brought up Tesla’s comparison challenge against the new Model Y:
The G7 is powered by a single rear-wheel-drive electric motor producing 292 horsepower (218 kW), it achieves a 0-100 km/h acceleration in 6.5 seconds. Impressively, the G7 can cover between 602 km and 702 km (374-436 miles) based on China’s generous CLTC standard, depending on the battery option and wheel size.
Two battery options are available, both using lithium iron phosphate (LFP) technology: a 68.5 kWh and a larger 80.8 kWh pack. With Xpeng’s advanced 5C charging technology, drivers can recharge up to 436 km (271 miles) of range in just 10 minutes.
Additionally, the G7 supports Vehicle-to-Load (V2L) functionality, providing up to 6 kW of external power, like the YU7 announced last week.
On the design front, the Xpeng G7 adopts the company’s second-generation “X Face” styling, featuring sleek running lights connected by a continuous LED strip, a closed front end for aerodynamic efficiency, and a distinctive “Star Ring” rear taillight design. Xpeng emphasizes the vehicle’s aerodynamics with a drag coefficient of just 0.238 Cd, slightly higher than the Model Y’s 0.230 Cd.
Inside, the G7 embraces minimalism, replacing conventional buttons with a large 15.6-inch central touchscreen powered by Qualcomm’s Snapdragon 8295 chipset. A standout interior feature is the expansive 87-inch augmented reality head-up display (AR-HUD), developed in collaboration with Huawei, that significantly enhances navigation and driving assistance.
Practicality is emphasized with ample cargo space: an 819-liter trunk that expands to 2,277 liters with the seats folded, plus an additional 120-liter compartment beneath the trunk floor and a modest 42-liter front trunk (frunk).
Xpeng is touting an adaptive AI-driven suspension system that actively adjusts to road conditions within milliseconds, allegedly surpassing comfort benchmarks set by the Mercedes-Benz GLE and Tesla Model Y. Cabin quietness also ranks high on Xpeng’s list of priorities.
Luxury and convenience features include dual 50W wireless phone chargers, a 20-speaker premium audio system, and a panoramic sunroof. Passengers in the second row enjoy premium touches like an 8-inch control screen, individual climate settings, a foldable table, and wireless charging.
The top-tier “Ultra” variant employs two proprietary Turing AI chips capable of delivering a massive 2,250 TOPS of computing power, enabling advanced Level 3 autonomous driving capabilities set to become active via an OTA update by December 2025, pending regulatory approval. Standard versions use dual Nvidia Orin-X chips with 508 TOPS.
The Xpeng G7 starts at 195,800 yuan ($27,325 USD) for the base “Max” variant with 602 km of range, stepping up to 205,800 yuan ($28,720 USD) for the longer-range “Max” (702 km) and topping out at 225,800 yuan ($31,510 USD) for the high-end “Ultra” trim.
Customers ordering the G7 Ultra before July 31 will receive complimentary upgrades including Nappa leather and power door handles.
G7 quickly demonstrated its popularity by securing 10,000 pre-orders in just 46 minutes.
Electrek’s Take
It’s not 200,000 orders within 3 minutes like the YU7, but Xpeng doesn’t have the brand power that Xiaomi has.
Nonetheless, it is pretty impressive.
The price is insane. The specs are competitive with the Model Y, which starts at 263,500 yuan and ranges up to 313,500 yuan ($36,770 – 43,750 USD), but the price starts at about $10,000 USD less.
Between this, the YU7 last week, and a few more models launching this month, the premium crossover segment is about to get crowded in China.
I think the Model Y is in serious trouble in China. We are about to see how it fares with real competition.
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Tesla’s humanoid robot program, Optimus, is reportedly in disarray amid the departure of the senior vice president in charge, Milan Kovac.
Production has been delayed due to a new redesign, as the robot has yet to prove useful in Tesla’s factories.
Elon Musk has previously set a goal for Tesla to produce 5,000 to 10,000 Optimus humanoid robots this year.
The goal has reportedly been delayed as sources within the Chinese supply chain report Tesla informed suppliers of a 2-month halt on orders.
AI Invest first reported the news, and The Information later corroborated the report:
Two supplier sources said Tesla has not explicitly stated it will reduce robot parts orders but will wait until the Optimus design adjustments are completed before finalizing a new mass production plan and resuming procurement. The adjustments may take two months. Musk recently stated on social media that the new version of Optimus has seen significant improvements over the second-generation Optimus unveiled in 2023 and now includes voice interaction powered by Grok.
The news came after we learned that Milan Kovac, the head of the Optimus program left Tesla last month, just months after being promoted to senior vice-president by Musk.
The new reports confirm that Ashok Elluswamy, who was elevated to senior vice-president in charge of self-driving at the same time as Kovac, is taking over responsabilities.
AI Invest reported some concerns from Tesla about Optimus that reportedly trickled down to Chinese suppliers:
According to Tesla’s feedback to suppliers, Optimus still faces hardware challenges, including overheating in some joint motors, low load capacity in dexterous hands, short lifespan of transmission components, and limited battery life. Tesla is currently evaluating samples from multiple dexterous hand suppliers, testing at least three different technical approaches. On the software side, Tesla may use more synthetic data to train the robot model, improving Optimus’ autonomous operation capabilities and success rate in performing complex tasks.
According to the report, Tesla had secured parts to build over 1,000 Optimus robots earlier this year and built quite a few, but they are currently only used “for moving batteries in Tesla’s battery workshops, with efficiency less than half that of human workers.”
The redesign is expected to delay plans by at least two months and could push many of Tesla’s goals.
However, Tesla is expected to still move ahead with the prgroam and it is likely to unveil the new generation of Optimus robots at its shareholders meeting this year.
Electrek’s Take
As I previously stated, I’m actually quite hyped for humanoid robots, but I don’t think they will be nearly as big as Musk claims and I simply don’t see Tesla having a significant advantage over the competition, which is significant.
Companies like Unitree are already selling robots, Figure has made impressive progress and poached from Tesla, then there’s Boston Dynamics and dozens more.
Kovac leaving just as Tesla is supposed to ramp-up production to 50,000 units next and make this a “multi-trillion-dollar” product is a red flag.The engineer would have certainly received sweet stock option packages when he was elevated to SVP and would have likely made a fortune if he would have been able to deliver on Musk’s goals.
But I think the real product at Tesla now is the stock – hence why they reportedly plan to unveil the next generation of the robot at the shareholders meeting and have it do another shady demostration, like it did at the ‘We, Robot’ event where the robots were remotely controlled by humans.
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Honda is stepping up its electric scooter game with the launch of its second electric model for Europe, the CUV e:. Following Honda’s previous debut of the EM1 e:, a compact, city-focused moped, the CUV e: brings more power, more range, and more real-world usability to riders who want a practical electric alternative to a 125cc scooter.
Now finally ready for the spotlight, the CUV e: is built on an underbone-style frame and powered by a 6 kW side-mounted electric motor producing 22 Nm of torque. That puts it squarely in the 125cc-equivalent category, allowing it to reach a top speed of 83 km/h (52 mph).
It’s not built for the highway, but rather for urban and suburban riders who want to achieve speeds seen on the fastest of urban roads and keep up with just about any traffic in the city. For that role, it looks like a solid performer – more than capable of keeping up with city traffic or carrying a second passenger.
One of the most useful features, especially for urban residents and apartment dwellers, is its use of Honda’s Mobile Power Pack e: swappable battery system. The scooter carries two of these Gogoro-style removable battery units, each rated at 50 V and 1.3 kWh. Combined, they offer over 70 km (43 miles) of WMTC-rated range. Compared to the Honda EM1 e:’s single Mobile Power Pack battery, the dual batteries of the CUV e: give Honda the chance to pull twice as much power or offer twice the range.
Honda’s swappable battery standard is designed for portability and long life, with each pack weighing around 10 kg (22 lb) and rated for 2,500 full charge cycles. Honda has been slowly building a swappable battery ecosystem, and the CUV e: is clearly meant to be part of that larger infrastructure play.
Charging of the batteries is designed to be done easily off-board, either at home or at a battery station (where available). A full charge from 0 to 100% takes about six hours per pack, but Honda says 75% can be reached in just three hours. While fast charging would be nice, the swappable format means riders can keep an extra pair charged and ready if necessary, eliminating downtime altogether.
Honda didn’t skimp on features, either. The CUV e: offers three ride modes (Sport, Standard, and Econ), plus Reverse Assist for easier maneuvering. It includes a fairly spacious flat floorboard, under-seat storage, LED lighting, a USB-C port, and keyless ignition. Buyers can choose between a five-inch color TFT display or an upgraded seven-inch “RoadSync Duo” screen, which supports turn-by-turn navigation, music control, Bluetooth phone integration, and EV-specific ride data.
Positioned as a mid-range electric scooter, the CUV e: fills the space between low-speed mopeds and larger, premium e-motorcycles. It’s a key piece in Honda’s broader electrification strategy, which aims to introduce 10 or more electric motorcycle models globally by 2025 and reach full carbon neutrality in its motorcycle division by the 2040s.
With anticipated pricing starting at around €4,000 (approximately US $4,300), the CUV e: is expected to roll out in Europe first, with other global markets potentially following. Its combination of practical range, moderate speed, high build quality, and swappable batteries could make it an appealing option in cities where electric two-wheelers are on the rise.
If the EM1 e: was Honda dipping a toe into the electric waters, the CUV e: feels like a confident step forward. It’s not flashy, but it’s functional, well-designed, and undeniably useful, which is exactly the kind of machine that could help electric scooters go mainstream.
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