Sam Bankman-Fried ordered $65B ‘secret backdoor line of credit,’ lawyer says

Sam Bankman-Fried ordered the co-founder of his cryptocurrency exchange FTX to create a “secret” backdoor that allowed his hedge fund Alameda Research to borrow $65 billion of clients’ money without their permission, according to testimony over the firm’s implosion.

Gary Wang was told to create a secret line of credit using customer funds from FTX to Alameda, said Andrew Dietderich, an attorney for FTX, in Delaware bankruptcy court on Wednesday.

“Mr. Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent,” Dietderich testified.

“And we know the size of that line of credit. It was $65 billion.”

Dietderich said the “backdoor was a secret way for Alameda to borrow from customers on the exchange without permission.”

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