In Sam Bankman-Fried's trial, a witness testified that a $8 billion understatement of Alameda's debt to the exchange's clients was the result of a software error brought on by the unusual handling of customer deposits at FTX.

The processing of deposits was a critical component of their relationship. According to former FTX developer Adam Yedidia's testimony, consumers would deposit fiat cash in the beginning by sending money to Alameda rather than directly to FTX. This unusual arrangement made it difficult for the businesses to keep track of the amounts due to clients. Yedidia explained that an accounting software flaw that was found by June 2022 led to a false impression that Alameda owed a lot more money than it actually did.

The interaction between Yedidia and Bankman-Fried that happened on a tennis court was the main focus of the prosecution. Midway through June, Yedidia had just fixed the accounting error that had previously indicated falsely that Alameda owed FTX customers $16 billion. He was concerned when he discovered there was still a $8 billion debt. As a response, Bankman-Fried said, "We were bulletproof last year, but we're not bulletproof this year."

The problem was fixed shortly after Bankman-Fried met with former FTX or Alameda executives Caroline Ellisson, Gary Wang, and Nishad Singh to discuss a complete accounting of FTX and Alameda, according to Yedidia, who is testifying with immunity. These witnesses are scheduled to appear throughout the trial.

On the third day of Bankman-Fried's trial, this witness testified. He is accused of fraud and conspiracy in connection with the fall of his cryptocurrency enterprise, which the prosecution has called a "house of cards." Yedidia reiterated throughout his testimony what he had already said: that he left FTX after learning that Alameda was utilizing consumer money to pay off creditors.

Bankman-Fried appeared inside the courtroom nodding and occasionally extending a modest smile to spectators before looking for his parents. He fidgeted but also worked on his laptop during the hearing, as he had on other days. Throughout the proceedings, his father, Joseph Bankman, took notes and gave them to Barbara Fried, the father of Bankman-Fried. During Yedidia's description of how deposits at FTX worked, one juror appeared to nod off.