More revelations have emerged during the trial of former FTX CEO, Sam Bankman-Fried, shedding light on alleged illegal activities within FTX and its sister company, Alameda Research. According to the Wall Street Journal, FTX offered to pay $5 million to LedgerX Chief Risk Officer, Julie Schoening, who had discovered a backdoor that allowed Bankman-Fried to transfer funds from FTX to Alameda Research. However, the settlement never materialized as FTX collapsed before the paperwork could be completed. Schoening, who was fired after reporting the backdoor, may be called to testify despite being subject to a non-disclosure agreement. The prosecution used the testimony of FTX’s co-founder and CTO, Gary Wang, to support its claim that Bankman-Fried had stolen up to $10 million through the backdoor. Wang also revealed that FTX’s “insurance fund” was fake, with the company fabricating figures to cover losses. Bankman-Fried allegedly instructed Alameda Research to absorb losses rather than recording them on FTX’s balance sheet. The trial will continue with Wang’s cross-examination, followed by the testimony of more witnesses, including Alameda’s former CEO, Caroline Ellison.

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Information	Details
Geography	North America
Countries
Sentiment	neutral
Relevance Score	6
People	Julie Schoening, Caroline Ellison, Sam Bankman-Fried, Gary Wang
Companies	Department of Justice (DOJ), Alameda Research, LedgerX, FTX, Wall Street Journal (WSJ)
Currencies	None
Securities	None