Former FTX CTO Gary Wang said that FTX used random numbers to falsify the value of its supposedly $100 million insurance fund.
FTX’s so-called “Backstop Fund” figure was a big lie, according to the former chief technology officer of the crypto exchangeCrypto exchange FTX used hidden Python code to misrepresent the value of its insurance fund — a pool of funds meant to prevent user losses during huge liquidation events — according to testimony from FTX co-founder Gary Wang.on Oct.
The 5.25 million FTT we put in our insurance fund in 2019 now makes the fund worth over 100 million USDWhen the prosecution surfaced the above tweet — among other public statements of its value — and asked Wang whether this amount was accurate he replied with a single word: “No.” An exhibit in the Oct. 6 trial shows the alleged code used to generate the size of the so-called"Backstop Fund” or public insurance fund.The prosecution shows that the "insurance fund" that FTX bragged about was fake, and just calculated by multiplying daily trading volume by a random number around 7500FTX's insurance fund was designed to protect user losses in case of huge, sudden market movements and its value was often touted on its website and social media.
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