BitMEX Research has revealed transcript excerpts from the fourth day of the trial of disgraced FTX founder Sam Bankman-Fried (SBF). It indicates that the accuracy of its insurance balances may be different from public perception.
FTX co-founder Gary Wang is currently testifying and making allegations that the numbers for FTX’s insurance balance fund were highly inaccurate.
FTX Insurance Data Generated Through Complex Math
In a post on X (formerly Twitter) BitMEX Research alleged that FTX’s insurance balance was “produced by a random number generator.”
Random number generators (RNGs) find its primary application in gambling and statistical sampling. This is where the objective is to generate random outcomes. However, using RNGs in the creation of insurance balances or bank account balances, constitutes fraud.
During the SBF trial, Wang testified and openly acknowledged that the numbers provided to the public were not accurate.
When Judge Lewis Kaplan asked was the numbers of the insurance balance fund to the public accurate, Wang stated it wasn’t
“For one, there is no FTT in the insurance fund. It’s just the USD number. And, two, the number listed here does not match what was in the database.”
Furthermore, Kaplan questioned why the database numbers are different to the numbers posted publicly. Wang responded admitting that it comes from a page on the website claiming to show what was in the insurance fund. However, he revealed it was allegedly “calculated separately.”
Wang explains that the numbers undergo multiplication and division to arrive at the final result presented to the public.
“Line 19 it’s taking that number, multiplying it — then multiplies that by a random number that’s around 7500 and then dividing the result by a billion. That’s a number that gets added to the number that shows up on the website.”
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