Former FTX CEO Sam Bankman-Fried Contemplated Closing Alameda Research
In a recently revealed Twitter thread draft from September 2022, former FTX CEO Sam Bankman-Fried considered announcing the closure of his hedge fund, Alameda Research. This occurred just two months before the collapse of FTX. During the trial, FTX co-founder Gary Wang testified that Bankman-Fried was anxious about an upcoming article that would expose the close ties between FTX and Alameda Research.
Bankman-Fried Praises Alameda in Draft Thread
In the draft thread, Bankman-Fried praised Alameda Research as a crucial player in the cryptocurrency ecosystem. He highlighted its role as a buyer during wild and volatile markets when no one else is willing to buy, providing liquidity and guidance for the industry. However, he also acknowledged Alameda’s major failure in losing track of millions of dollars’ worth of Ripple tokens due to accounting negligence in 2018.
Bankman-Fried used the opportunity to dismiss claims made by competitors regarding excessive ties between Alameda and FTX. He stated that these claims were distractions and not true.
Winding Down Alameda Research Halted Due to Debt
Bankman-Fried’s plan to wind down Alameda Research was halted due to the firm’s significant debt of $14 billion owed to FTX. When informed about this inability, Bankman-Fried acknowledged the situation but never executed the closure as planned.
Wang Concludes Testimony on Day Six of Trial
Gary Wang concluded his testimony on day six of the trial and once again admitted to committing crimes with Bankman-Fried. Last week, Wang confessed that he and Bankman-Fried engaged in wire fraud and other deceitful practices that led to the collapse of FTX. Wang disclosed that they illegally withdrew $8 billion from FTX funds through Alameda Research, claiming that Bankman-Fried directed these actions.
Hot Take: The Unresolved Fate of Alameda Research
The revelation of Sam Bankman-Fried’s draft thread announcing the possible closure of Alameda Research provides insight into the challenges faced by the cryptocurrency hedge fund. While Bankman-Fried praised its contributions to the industry, he also acknowledged significant failures. The inability to wind down Alameda due to debt highlights the intertwined nature of Alameda and FTX. As the trial unfolds, the fate of Alameda Research remains uncertain, leaving questions about its future role in the cryptocurrency ecosystem.
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