FTX fallen founder Sam Bankman-Fried wanted to shutdown Alameda before bankruptcy FTX fallen founder Sam Bankman-Fried wanted to shutdown Alameda before bankruptcy
SBF said Alameda's association with FTX had generated too much FUD that failed to justify its existence.
2 min read
Updated: Oct. 11, 2023 at 9:12 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Embattled FTX founder Sam Bankman-Fried (SBF) wanted to close down his other company, Alameda Research, according to an unpublished post revealed at his ongoing fraud trial.
In the extensive post shared on X by a former Alameda employee, SBF described Alameda as one of his “largest successes–and then, briefly, largest failures–and then again successes.” However, the disgraced founder wanted to shut the company because the FUD its relationship with FTX generated was “too much of a burden to justify its existence.”
The praises
While admitting he might be slightly biased, SBF stated that Alameda had “contributed a lot to the digital asset ecosystem,” pointing out that the company “contributed liquidity, of course–in markets, and stablecoins, and venture.”
“Alameda has been one piece backstopping the ecosystem.”
SBF continued that the company “has been a buyer when no one else is ready to buy–when markets are wild and volatile, and prices are crashing, and capital is scarce–whether that’s projects, tokens, or companies.” And further highlighted the company’s role in certain crypto projects like Solana and Sushiswap.
According to the thread, SBF viewed Alameda as “a large global source of liquidity, guidance, and backstopping for the entire ecosystem” even after he left.
The blames
In his post, SBF blamed unnamed competitors for spreading FUD about the relationship between FTX and Alameda to distract from their problems.
According to SBF, the actions of these competitors are “too bad for the [crypto] space.” He said:
“It’s especially galling because some competitors have internal trading desks that are an (open) secret, which specifically use confidential customer information to manipulate their own markets.”
The post further revealed that SBF had plans for Alameda to transition into an investment firm and an infrastructure developer.
Alameda, FTX
Alameda’s relationship with FTX proved to be the undoing of the once-great SBF-led crypto empire. The companies filed for bankruptcy last year after the exchange suffered a bank run.
The ongoing trial has revealed that SBF orchestrated the misappropriation of FTX customers’ funds. Insiders at the exchange, like Gary Wang, FTX co-founder, and Caroline Ellison, the former CEO of Alameda, have testified that Alameda enjoyed special privileges at the defunct exchange and that SBF established the systems that facilitated the fraudulent operations.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Ryan Salame is the former co-CEO at FTX Digital Markets (FDM), the Bahamian subsidiary of FTX Trading Limited.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
Caroline Ellison is the former lead trader and former CEO at Alameda Research.
