It became known when the FTX crisis began

The Wall Street Journal, citing sources familiar with the situation, reported that the collapse of Alameda Research, the company of the former CEO of the FTX exchange, began long before the bankruptcy of the site.

Alameda’s first major deal was an arbitrage game in Japan, where bitcoin was sold at a higher price – the company managed to make profits from $10 million to $30 million. Alameda tried to convince everyone that he was making a huge income from his trading activities, but in reality the company big losses due to their trading algorithm, which incorrectly predicted the price movement of digital currencies. In 2018, the company lost more than half of its assets.

Despite this, Sam Bankman-Fried actively raised funds for Alameda from lenders and investors, promising a return of 20% to save the firm. After that, FTX was created, and Alameda became its main market maker and was used to stimulate the growth of the exchange. On occasion, Alameda played the underdog in trades to win customers over to FTX. Also, through Alameda, the crypto exchange had access to companies of interest to it.

Comments (No)

Leave a Reply