In what can be seen as a startling disclosure, Gary Wang, co-founder of the FTX exchange, recently shed light on the unconventional and seemingly arbitrary method employed by the platform to determine the size of its insurance fund. During his testimony, Wang explained the methodology in depth: the exchange decided on the amount to display in the fund by taking a seemingly random number – roughly 7500 – and then multiplying it by the exchange’s daily trading volume. The resulting figure was then divided by a billion to achieve the final amount.
This approach, as it turns out, did not provide an accurate representation of the actual fund size. Wang openly acknowledged the discrepancy, admitting that the real balance of the insurance fund was less than the number shown to the exchange’s users and the wider public. This revelation raises concerns over transparency and trustworthiness in the digital exchange’s operations. Further strengthening the claims made during Wang’s testimony, a section of the exchange’s source code was presented, which highlighted the mentioned disparities in the calculation method. This incident serves as a reminder of the importance of transparency and accuracy in financial operations, especially in the rapidly evolving digital currency landscape.
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