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SBF ex to testify in upcoming trial

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Caroline Ellison, the former CEO of Alameda Research, is expected to testify against Sam Bankman-Fried in his upcoming fraud trial on October 10. Bankman-Fried is accused of misusing FTX customer funds for personal gain and engaging in high-risk trading practices.

Gary Wang, the co-founder and former CTO of FTX, testified that Bankman-Fried instructed him to write code that allowed Alameda to use $8 billion of FTX customer funds without their knowledge or consent. Bankman-Fried also sought special privileges for Alameda at FTX, such as the ability to have a negative balance and avoid liquidation, which Wang implemented.

Wang revealed that Bankman-Fried instructed Alameda to use FTX customer funds to purchase FTT, the native token of FTX, with the intention of artificially increasing its price and popularity. However, this strategy led to issues when Alameda held billions of FTT as loan collateral, raising doubts about the stability of both FTX and Alameda. This resulted in a massive sell-off of FTT by other investors, including Binance, causing its value to plummet and triggering a rush of FTX clients withdrawing their funds.