FTX co-founder and chief technology officer Gary Wang focused his statement on a single code: “allow_negative.” Since SBF did not code at FTX, Wang was responsible for orchestrating all technical changes at the company. The allow_negative code allowed Alameda Research’s balance sheets to be negative, a somewhat uninspired name that was never intended for public use.
The code essentially allowed Alameda Research an unlimited credit limit, which was ultimately paid for with FTX customer funds. Alameda ended up borrowing $14 billion from FTX, an amount it was unable to repay. Alameda was always portrayed by SBF as a liquidity provider in the crypto world, but in reality FTX customers provided the liquidity. This is a central point in the prosecution’s case, and Wang pointed to the existing software that made this possible.