Jump Trading suffered a significant loss of $206 million in the collapse of FTX, making it one of the largest losses by a non-FTX or Alameda entity. This information was revealed in Michael Lewis’ book, Going Infinite, which cited private documents discovered by former FTX COO Constance Wang. The book also highlighted that nearly half of the $8.7 billion owed to FTX account holders was concentrated in the top 50 accounts, with many account holders using pseudonyms.
One entity, called “Tai Mo Shan Limited,” affiliated with Jump Trading, lost over $75 million. Virtu Financial Singapore also reported losses exceeding $10 million. Interestingly, several disguised accounts were traced back to FTX employees, including Constance Wang herself, who suffered personal losses of around $25 million.
Wang, who had oversight of the sales team at FTX, was aware of concerns from high-frequency traders regarding the relationship between FTX and Alameda Research. While Alameda did not have an unfair trading advantage as suspected, FTX had provided them with free loans using deposits from high-frequency traders.
The book also shed light on FTX’s extravagant endorsement expenditures. Internal documents revealed that FTX had signed lucrative deals with Major League Baseball ($162.5 million), Riot Games ($105 million), Coachella music festival ($25 million), Steph Curry ($31.5 million), Mercedes’s Formula 1 team ($79 million), and Shark Tank’s Kevin O’Leary ($15.7 million). Wang questioned these expenses but assumed they were funded by Alameda’s profits or Sam Bankman-Fried’s successful investments.
Wang also discovered a concerning Alameda Research balance sheet that differed significantly from previous versions. The document showed Bankman-Fried’s private investments totaling over $4.7 billion but revealed liabilities of over $10 billion in customer deposits meant to be held by FTX that ended up in Sam’s private trading fund. With only $3 billion in liquid assets, the whereabouts of the remaining money became a pressing question.
In conclusion, Jump Trading incurred substantial losses in the FTX collapse, and many of the top accounts owed significant amounts. FTX employees and high-frequency traders raised concerns about the relationship between FTX and Alameda Research. Additionally, FTX’s extravagant endorsement deals and the questionable Alameda Research balance sheet added further complexity to the situation.
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