According to an insider , CEO of alameda explained how they lost it all

All-Hands meeting:

At the all hands meeting, Caroline revealed the truth. A little over a year ago, FTX started spending a lot of money. Various investing shell companies set up w/ FTX or Alameda names were created, some known most unknown, that invested in various illiquid assets that no one in the firm or FTX knew about. FTX Ventures was a large money sink. These various illiquid assets were also money sinks. I think one of the investments was like 1bb on a crypto mining company that went bankrupt? Alameda had also bought out Binance's stake in FTX for ~1-2bb.

FTX was buying luxury apartments in the Bahamas, building an office in the Bahamas and then currently in the middle of building a newer, costlier office that would be in the shape of an F. Stadium naming rights, advertisements, endorsements also aren't cheap. It's important to note that at this point in time, none of the user funds had been touched and this had all come from mainly from Alameda loaning FTX money and being given FTT as collateral. Alameda was able to loan so much money to FTX partly because they just had a lot of money, but also because they had many loans themsevles from lenders such as Genesis. Getting loans at that time was generally pretty easy. There is where the hole in the balance sheet came from. Around 6 months ago,

LUNA crashed to 0, sending reverberations across the crypto world as they wiped out -800bb in market value. Alameda didn't actually lose much money directly from Luna crashing, in fact they were probably net short at the time of the crash. However, the Luna crash caused many firms to become liquidated, the most notable one being 3 Arrows Capital(3AC). 3AC had taken out a ton of loans(see point above about loans being easy to get), and 3AC defaulting caused a lot of these loaners to go bankrupt. This event created what is known as the “credit crunch”. In the credit crunch, many loaners suddenly recalled all of their loans just to see who was still liquid. Alameda lost a lot from giving out loans to firms who defaulted. Alameda was

now also on the hook for money they didn't have, since they had given a lot of the loan money to FTX or had lost it loaning to now bankrupt counterparties. SBF had two choices at this point, let Alameda get liquidated or send user money from FTX to ensure Alameda's survival. As you read online, SBF chose the latter. From this point onwards, it was just a ticking time bomb before the truth was found out and both FTX and Alameda liquidated. No one at FTX or Alameda knew how much was spent and that FTX user funds had been used to save Alameda All the credit crunch did was expedite how quickly FTX/Alameda's frivolous spending would be found out.

Caroline painted Alameda and FTX getting liquidated as a likely event rather than a tail event(which would've been helpful to know before they hired me…). It was also revealed at this time that Binance had stepped away from their deal to acquire FTX, citing that the hole in the balance sheet was too big to fill.

  • – this is a repost from twitter, I found this here – – –

According to an insider , CEO of alameda explained how they lost it all

39 thoughts on “According to an insider , CEO of alameda explained how they lost it all”

  1. I think you should have explained first that you worked there and were involved in the meeting

  2. They really were making a building on bahamas with the shape F lmao ( f in chat boys)

  3. It feels kind of weird and satisfying knowing that Alameda research, after having ‘highly intelligent’ quant traders, their own CeX where they can frontrun other’s trades and buying the tokens before it got listed on FTX; they still lost a shit ton of money.

    It feels good that you are not the only one who is losing money trading crypto .

  4. Stop keeping cryptos in CEX and we won’t get bubbles like this again.

    Not your keys…. Not your ….

  5. > No one at FTX or Alameda knew how much was spent and that FTX user funds had been used to save Alameda

    I’m pressing f to doubt

    edit: it’s x to doubt, but f is more appropriate here 😂

  6. Explanation actually makes it worse.. F shaped island.. Crazy world we life in

  7. They also sponsored the Mercedes Formula 1 car which is not cheap to sponsor.

  8. Liquidated themselves and VCs is ok

    Liquidated retail who didn’t understand “not your keys… not your ….. “

    Not cool.

  9. Again, it seems that trading is not the way to go. Just DCA guys, get it off of to a cold wallet and you’ll thank yourself in some years 🙂

  10. > Alameda loaning FTX money and being given FTT as collateral

    So they lent money to themselves using their own shitcoin as collateral

  11. Copy/pasting the big Banks and Wallstreet boys from 2008, thinking they would get away from it forever.

    All these fuckers deserve some serious jail time!

  12. This is the hedge fund version of people that mortgage their house to buy crypto at all-time high and then wreck themselves.

  13. Don’t trust quant traders who are also gamblers, they’ll fudge the math in their head to convince themselves they can still win everything back.

  14. Soooo… All they had to do was let Alameda default and bankrupt. Then they wouldn’t be $1b in the hole and being investigated by the feds. Got it.

  15. It’s pretty much self explanatory, she didn’t have a clue of what she is doing

  16. >SBF had two choices at this point, let Alameda get liquidated or send user money from FTX to ensure Alameda’s survival.

    This is the part where they really fucked up, and why SBF and the rest of the leadership at FTX/Alameda who had a part in this should not only be universally reviled, but probably spend some time in a prison cell. They consciously decided to fuck over their users.

  17. FYI, “Mr. Whale” is just about the least reliable source out there. He’s known for intentionally sharing and creating misinformation – he lost his last Twitter account by forging a legal document attempting to fud a crypto company (I can’t remember who off the top of my head, possibly Nexo).

    One of the most egregious examples of their misinformation was a Medium hit piece where they attempted to frame Michael Saylor as a drug addict by sharing the arrest warrant of a different Michael Saylor. When it was pointed out that the Michael Saylor in question was not the Bitcoin buying head of Microstrategy, was there an apology, edit, or retraction? Nope, the article was left there misinformation and all. Indeed, it was probably intentional in the first place. The article was located here, but it seems Mr. Whale’s Medium account is now suspended and under investigation. I wonder why… 🙄

    Edit: Lol, “” leads to a BNB gambling app.

    Edit 2: His Telegram group is full of gambling, memecoin, and NFT shilling. His Twitter account is an engagement farming front to lure in suckers.

  18. They knowingly took advantage via (modus of operandi) infinite money glitch and then claimed they never used customer’s money and have no bad intention. Haha. I hope SBF and his gang rot in jail

  19. These people were the worst investors in the history of business. A monkey making random investments would have done better than these morons.

  20. This is an FBI agents wet dream.

  21. Considering they bought out binances stake for 1.2b it makes me wonder what binance has been hiding

  22. Doesnt matter how good of a trader you think you are if you have the risk management of a fucking banana.

  23. So basically crypto version of Enron? Smartert people in the room. Let’s get investors, banks to give us lots of money because we have these valuable things that no one understands, but hee hee we set the value ourselves.

    Add in the immaturity factor of not having a clue on how to run a business. Let’s program a few things. Hey, all this money over here that traders gave us for their accounts …let’s move that around, no one will notice and if they do, we can show the this valuable thingy that is the colateral as you know, everything in crypto only gets more valuable. And we can have so much fun in the Bahamas not running a business.

    Wait, they want their money back? Why don’t they understand this thingy is more valuable than cash? Mom, Dad?

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