About a year after the collapse of the crypto exchange FTX, the trial against the founder and CEO Sam Bankman-Fried has begun in New York. The prosecution and former FTX managers turned state witnesses are first up.

On the third day of the trial against Sam Bankman-Fried, the former chief technology officer of the collapsed crypto exchange FTX, Gary Wang began his testimony, incriminating his former business partner.

Among other things, he granted Bankman-Fried's brokerage house Alameda a $65 billion line of credit, he said in the New York court, as reported by «Reuters», far more than others could borrow.

Fraud and Embezzlement

The indictment accuses Bankman-Fried of fraud and embezzlement of billions of dollars of customer funds. He allegedly secretly moved funds around to speculate and finance his lavish lifestyle. «It withdrew so much that FTX was not able to repay customers who were trying to withdraw,» Wang said.

Alameda's outstanding debts totaled $8 billion at the time of FTX's bankruptcy, he said.

Wang, one of the crypto exchange's co-founders, is just one of several former FTX managers who have already pleaded guilty to fraud and are cooperating with prosecutors. He has admitted to manipulating software to conceal the shifting of FTX customer funds to Alameda.

Other prosecution witnesses include Nishad Singh, FTX's chief development officer, and Alameda CEO and Bankman-Fried's former girlfriend Caroline Ellison.

Over a Century in Prison

Bankman-Fried admitted to corporate governance mistakes but is defending himself against the fraud charges. The trial is scheduled to last six weeks. If convicted, he faces up to 115 years in prison.

Earlier, one of FTX's investors testified. Matt Huang, the head of Paradigm, a hedge fund specializing in cryptocurrencies, said he'd been assured that Alameda wouldn't receive preferential treatment on the platform. He had expressed concern about the relationship between FTX and Almeida and had been assured that it would be dismantled over time. Paradigm had invested about $278 million in FTX as of 2021, which it has completely written off.