A man who withdrew before FTX went bankrupt has disappeared from the public eye for nearly a year and may appear in court to accuse SBF. Apart from being mentioned in relation to Alameda, Trabucco has not been accused of any wrongdoing and is likely to live as a free man.
Author: Jaleel, BlockBeats
The SBF trial has entered its second week and is facing multiple serious criminal charges. This trial has revealed a series of insider trading and misappropriation of funds, and has brought together three key witnesses once again.
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As the co-founder of FTX and SBF’s right hand, Gary Wang gained SBF’s trust, but today he explicitly stated in court that he hopes to avoid prison by pleading guilty and cooperating with the investigation, although federal prosecutors have made no promises to him. In addition to Gary Wang, other key figures and potential witnesses in the FTX case include Trabucco, the former CEO of Alameda Research, who cleverly left FTX three months before the incident and avoided this “disaster”.
During the trial, the friendship between these three individuals no longer exists. Their testimonies will be crucial in determining SBF’s fate.
Former FTX co-founder Gary Wang, as a witness, was the first witness to testify all day during the trial. Throughout the trial, SBF paid close attention to Gary Wang’s testimony, often bowing his head and remaining silent, and making unnatural movements with his body language.
“SBF allowed Alameda to withdraw funds without limit; as early as 2019, the function of Alameda stealing customer funds was implanted in the FTX system; the balance of the insurance fund announced by FTX was generated by a random number generator…” Every piece of information that Gary Wang exposed was like a deep-water bomb.
Knowing that both Gary Wang and Trabucco were witnesses, SBF rubbed his eyes with both hands, and memories inevitably traced back to thirteen years ago when the three of them met at a high school math camp.
Three genius teenagers meet at an elite high school math camp
In 2010, Mount Holyoke College held a five-week math summer camp, and MIT was training for math competitions at the time. These competitions later helped the three of them enter MIT’s math program in 2011, which is one of the most powerful math programs in the world.
The three math prodigies, SBF, Gary Wang, and Trabucco, formally met for the first time here.
Not only SBF, but Trabucco also often recalls this period of cherished teenage years. In an interview in 2020, Trabucco recalled that math competitions helped develop the quick thinking required for him as a trader, and his close friend SBF hardly slept during the math camp.
This diligent quality has been maintained throughout the entrepreneurial process at FTX. We all know that during the entrepreneurial period, SBF only sleeps for 4 hours a day, and staying overnight in the office is a common occurrence.
SBF in the Alameda office, image source from the internet
Reuniting at MIT, the relationship between the three became closer
Because of their good performance in math camps and math competitions, all three of them successfully entered the Massachusetts Institute of Technology (MIT). Trabucco studied mathematics and computer science, where he learned about Bitcoin and demonstrated his leadership skills by serving as the president of the undergraduate math association.
SBF pursued a Bachelor’s degree in Physics with a minor in Mathematics. In addition to focusing on studies, SBF also participated in various student groups and joined a fraternity called “Epsilon Theta,” which had about 20 members and often held parties on campus, such as drinking, solving puzzles, and playing board games.
During their time at MIT, SBF became roommates with Gary Wang and reestablished contact with Trabucco, further strengthening their relationship. The bond between the three became even closer.
Gary Wang (third from the left), SBF (third from the right), image source: Bloomberg
After graduating from MIT in 2013, Trabucco worked for two years at the quantitative trading firm Susquehanna International Group, LLP, where he was responsible for handling trading funds in the bond exchange. After obtaining degrees in mathematics and computer science, Gary Wang worked at Google for a period of time. SBF worked at Jane Street Capital, a proprietary trading firm owned by Bankman-Fried, where he traded international ETFs. After working there for four years, SBF moved to the Centre for Effective Altruism (CEA) as the Director of Development.
After six years of wandering, a return to Alameda and FTX
In November 2017, with the support of Jaan Tallinn and philanthropist Luke Ding, SBF and Tara Mac Aulay from CEA co-founded the quantitative trading firm Alameda Research, which had daily trading volumes exceeding billions of dollars in the cryptocurrency market.
It was also in the same year that Trabucco left Susquehanna, the quantitative trading firm, and started trading cryptocurrencies. He reconnected with SBF, who had founded Alameda in San Francisco. In early 2018, SBF finalized his trading strategy, which involved arbitrage opportunities between Japan and the United States, generating daily revenues of up to $25 million. After attending a cryptocurrency conference held in Macau at the end of 2018, SBF came to Hong Kong and founded the cryptocurrency derivatives trading platform FTX in April 2019.
In 2019, the three math prodigies had already completed their transformation. Gary Wang held the titles of co-founder and CTO at FTX, while Trabucco joined Alameda as a trader. Six years after graduating from MIT, they reunited because of the birth of Alameda and FTX.
It is well known that Caroline is the CEO of Alameda and has a close relationship with SBF. In an interview with Forbes, Caroline mentioned witnessing the friendship among three people: “I met SBF’s close friends Nishad Singh, Gary Wang, and Sam Trabucco, who joined shortly after. They all hold executive positions with SBF and share a common interest in effective altruism.”
During his time at FTX, Gary Wang has always been low-key. Four former colleagues who did not want to disclose their identities revealed that Gary Wang is a quiet and programming-obsessed person. A source familiar with Alameda and FTX business stated, “From an employee’s perspective, Gary is always distant and rarely appears in the office. He prefers to work from home and is almost the only one who can do so. Others always have to stay in the office, but Gary is an exception.”
With a net worth of nearly $5 billion, Gary Wang is very protective of his identity. The only visible photo of him is a silhouette, and no front-facing picture was found when he was included in the Forbes 400 list of wealthiest individuals. It wasn’t until last year’s arrest that his appearance became known to the public.
In contrast to Gary Wang’s low-key nature, Sam Trabucco, who is reported to have a background as a risk quant trader using mathematical models, is a passionate poker player and gambler in private. He openly boasted about being banned from three casinos for card counting at the blackjack table due to his exceptional skills. Trabucco also claimed to use poker and casino strategies in trading on social media in January 2021: “Doing it right is a poker term that means when your odds are the best… you want to bet more.”
This is indeed in line with his trading style at Alameda. As a quantitative trader, Trabucco has implemented high-risk crypto trades at Alameda.
In addition, Trabucco is a crossword puzzle enthusiast and has been a constructor for The New York Times crossword puzzles. According to a previous episode of the FTX podcast, as of 2020, Trabucco ranked eighth among all crossword constructors at The New York Times.
Sam Trabucco on social media, image source from the internet
A former employee stated that Trabucco is a conservative person in private but deeply committed to his work at Alameda. However, he has shown great enthusiasm for trading, data, and strategy games.
Trabucco’s interests and work style have many similarities with FTX founder SBF. Both of them believe in high-risk trading concepts and are enthusiastic about various intellectual games, which seems to have laid the foundation for their cooperation. In October 2021, Trabucco was appointed as the Co-CEO of Alameda, working together with Caroline. “Having two people who can take ultimate responsibility for things is a good thing for us,” Caroline once said.
In 2020, Trebucco bought a four-bedroom house in Wells, Maine for $500,000, and it’s rumored that his parents now live there. The following year, he purchased a luxury apartment in San Francisco for nearly $9 million, which is 3,800 square feet and has a view of the Golden Gate Bridge.
Separated at the previous important intersection
The reunion of the three didn’t last long. On August 25, 2022, Trebucco posted a long tweet titled “happiness” on social media, bidding farewell to Alameda.
“Last year, when SBF announced that Caroline and I would be co-CEOs of Alameda, our goal was to align our titles with reality. We have been co-CEOs for some time now, and we wanted our external image to reflect that,” he said. He explained that he had reached a stage in his life where he had to prioritize other things and could no longer have a strong daily presence in Alameda. Caroline will continue to serve as the sole CEO, while Trebucco will remain as an advisor to accompany Alameda.
“Alameda is the most formative time of my life”
“Alameda is a great place. The problems we solve here are still the most interesting I know, and the team is still the most impressive team I know. It’s a great environment with plenty to do, and work can easily become your life. For a long time, I loved it. Over the years, I can’t think of anything more valuable than giving myself to Alameda. Honestly, being a part of it is thrilling, despite its difficulties, exhaustion, and demands.
My time in Alameda has been the most formative time of my life. I’ve learned how to think, discovered how far I can push myself, had incredible experiences in the trenches with lifelong friends, and we often succeeded. I will miss it all—I really will.”
Trebucco chose to leave after ten months as co-CEO of Alameda. Although he feels reluctant, he is happy. “I’ve been really happy lately, spending a lot of time traveling, visiting friends and family, exploring myself, and so on. I also bought a boat, which is cool. I need to relax, and I’m really, really happy.”
FTX bankruptcy application form, image source from the internet
In March 2022, Alameda made a $2.51 million deal with the American Yacht Group to purchase a 52-foot yacht, as shown in the bankruptcy application form.
Sam Trabucco on the yacht (pictured on the right), source from the internet
Driving the yacht named “Soak My Deck”, in the following months, Trebucco began his sailing journey.
We all know what happened in November 2022. The news broke out that FTX customer funds were misappropriated to Alameda Research, causing a severe shortage of funds for FTX.
During the three-day period, the market value of assets held by Alameda Research plummeted, leaving a huge funding gap. At the same time, FTX faced a run on its funds. CZ sold the FTT tokens he held (Alameda Research held a large amount of FTT), and approximately $4 billion in customer withdrawals were made every day for several days.
“The bigger yacht sank”
On November 12th, FTX filed for bankruptcy restructuring, and the larger yacht than Trebucco’s sank, causing a huge impact on the cryptocurrency market. To this day, the industry is still under the influence and shadow of FTX’s collapse.
SBF described the event based on his memory, stating that he did not operate Alameda and did not fully understand the key events: “I founded Alameda Research in 2017, which is a private cryptocurrency trading company. In 2019, I founded FTX International, a non-US cryptocurrency trading platform for non-US customers. At that time, I began to transition from my role at Alameda Research to FTX. In 2020, I founded FTX.US, a US cryptocurrency trading platform that does accept US users.”
When reconstructing the events of 2021-2022, I relied on memory and inference, because I did not fully understand these events at the time and cannot now obtain the relevant data to confirm or deny my speculation. Especially in the past year, I have not been operating Alameda Research.
After that crash, as far as I know, Alameda had approximately $11 billion in assets and approximately $11 billion in liabilities, including its positions in FTX. However, many assets were not highly liquid and could not be sold quickly. I believe there were approximately $3 billion in highly liquid assets, leaving a liquidity funding gap of approximately $8 billion.
This put great pressure on FTX and forced the exchange to require additional margin from customers holding positions. Alameda Research was unable to provide sufficient liquid assets to add margin, resulting in a default by FTX International, which in turn was unable to meet customer withdrawal requests.”
SBF brought to court, source from the internet
In December 2022, SBF was arrested in the Bahamas. In the days leading up to the arrest, SBF expressed regret for disappearing from the media after the incident and could have done more. He repeatedly emphasized his regret and repeatedly said “I messed up”, indicating that he wanted to “actively resolve customer issues”. SBF, who has always identified himself as a follower of “effective altruism”, stated that he is still trying to do things that are beneficial to the future of the world and deeply regrets messing things up.
The Man Who Escaped Before FTX Bankruptcy
Trabucco’s timing of resignation was quite clever, just over two months before SBF’s cryptocurrency empire filed for bankruptcy and lost $8 billion in customer funds. He was lucky enough to be the man who escaped before FTX’s bankruptcy.
On the other hand, Caroline, another CEO who stayed at Alameda, was not so lucky. She faced fierce criticism from many cryptocurrency supporters, accusing her of being the culprit behind Alameda’s collapse. However, among the harsh criticism, there were also a group of people defending her.
One of Caroline’s supporters claimed that many people defending Caroline gathered on the peer-to-peer platform Urbit, created by computer scientist Curtis Yarvin. They believe that Caroline is a scapegoat and claim that Trabucco, the former Trabucco, is the mastermind behind Alameda’s internal collapse.
According to researcher Niklas Polk: “The potential loan provided by FTX to rescue Alameda was likely in response to significant losses and/or a severe lack of liquidity at that time. Our data indicates that such a loan may have occurred as early as June, around two months before Trabucco’s resignation.” Niklas Polk added.
A netizen’s meme implies that Sam Trabucco was “watching from the other side” in the FTX case. Source: the internet
Trabucco did not respond to requests for comment. In the midst of chaos at FTX, Trabucco had previously posted two related tweets:
On November 6th, Trabucco retweeted one of Caroline’s tweets with his own words: “CZ, if you want to minimize the market impact of your FTT sales, Alameda will be happy to buy it all from you today for $22!” Two days later, on November 8th, Trabucco wrote on Twitter: “Love to everyone—I know the past few days have been dark for many, and I hope the road ahead is brighter.”
Since then, Trabucco has disappeared from the public eye, both online and in reality.
“The Smartest Person in the Room,” Where is Trabucco?
Community members have been searching for his whereabouts on social media, frequently asking “Where is Trabucco?” and even offering rewards.
Rainbow Runner (@RRunner144) said: “Friendly reminder, Trabucco can still walk and sail freely on the yacht you paid for through the FTX Ponzi scheme. Anyone who can find a 53-foot Suenos with the hull number VHS53A3JK122 will receive bonus points. I indirectly paid for this boat and am happy to know where it is.”
However, some people pointed out that Trabucco was not named in any official indictment, and he was not accused of any wrongdoing, except for a brief mention of his relationship with Alameda. Perhaps he has been cooperating with the Federal Bureau of Investigation and is likely living as a free man.
Cryptocurrency KOL IamNomad (@IamNomad) said on social media: “Trabucco is a whistleblower protected by the US government. Please prove me wrong.”
Recently, there was also a post on Riddit asking about Trabucco’s whereabouts, and many people’s comments had the same opinion.
A netizen named “btc_clueless” said: “I thought he was the first one to come forward and accuse SBF. His shoes have the least dirt: he left FTX before the shit hit the fan, and he was never part of the core circle. He must have known that Alameda had unlimited credit on FTX. Or maybe he didn’t know about the expansion event because Alameda had good liquidity before Luna crashed, so there was no need to dig deep into FTX user funds? There are many unknowns.”
A netizen named “DrinkYourWater69” also speculated: “He might be on some inconspicuous island. I bet he turned his back early, told the FBI everything he knew, to protect himself and get a lot of benefits.”
But whether it’s “He knew EVERYTHING but was willing to walk away” or has long been cooperating with the FBI, this enthusiast who excels in making crossword puzzles has the ability to take one step and see ten steps, and is obviously the smartest person in the FTX and Alameda room. Some community members also pointed out that the naming of the yacht “Soak My Deck” is an indication that this crossword enthusiast already knew something was wrong with FTX and Alameda.
“If there’s one thing I learned at Alameda, it’s how to make the right decisions, and this is the right decision for me.” Trabucco said when he left Alameda, and this time in the SBF trial, Trabucco is listed as a witness but has not yet appeared in court.
After the trial, they will eventually go their separate ways in despair
9 months and 20 days after SBF’s arrest, he appeared in court on October 3rd local time, where prosecutors accused him of deliberate deception of clients and business partners, with thousands of pages of evidence including internal documents and recorded conversations.
In the first week of the SBF trial, Gary Wang played the most important witness and gave a lot of testimony. Gary Wang, who pleaded guilty in December 2022, admitted to crimes such as wire fraud, commodity fraud, and securities fraud, and could face up to 50 years in prison. He can only hope to avoid imprisonment by cooperating with the investigation in court, although federal prosecutors have not made any promises to him.
During his testimony, Wang stated that the functionality required for Alameda to steal customer funds had been implanted in FTX’s computer system as early as 2019. In addition, Alameda had three privileges compared to other customers. Alameda was allowed to trade with more funds than it actually had in its account. As Wang testified earlier, Alameda could extract unlimited funds from FTX.
Furthermore, Alameda’s credit limit was increased to 65.3 billion US dollars. This feature was later utilized to withdraw fiat and cryptocurrency worth 8 billion US dollars, surpassing the amount held by the trading company in its accounts—similar to the gap FTX faced in November last year when it failed to meet customer withdrawal requests. Wang clarified that the additional funds came from FTX customers who did not explicitly choose to lend out their funds.
Gary Wang in front of the court, image source: Bloomberg
In the second week of the trial, Caroline also contributed significant testimony: “Despite publicly distancing himself from Alameda and claiming not to manage the company, SBF provided guidance on how to handle the FTT tokens held by Alameda and its venture capital risks, as well as other important business decisions, instructing Alameda to borrow as much money as possible. This is something he often talked about. SBF had said he wanted to buy more (FTT) because he didn’t want any of our loans to be at risk, and putting FTT tokens on the balance sheet might be misleading.”
In her testimony, Caroline also mentioned Trabucco. The US Assistant Prosecutor asked Caroline, “How did the defendant respond when Binance mentioned repurchasing? Who was involved in the discussion and where?” Caroline replied, “Otherwise, Binance would get into trouble. At the time, we were in the Hong Kong office, and SBF, Trabucco, and I participated in the discussion. Trabucco was still the Co-CEO of Alameda at that time.”
Many people are eagerly anticipating the next witness after Caroline, who has not spoken out for almost a year. It can almost be foreseen that Trabucco’s testimony will also point to SBF. Unlike the outcome of SBF and Gary Wang, Trabucco, who left before FTX’s bankruptcy, is believed by many to eventually gain freedom.
Thirteen years ago, three genius young men who participated in the elite high school math camp might never have expected the current outcome.
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