WCustomers, investors, and potentially law enforcement, the impending fate of cryptocurrency may rest on two key questions: What did they know about the Alameda Investigation, and when did they know it?
Alameda, the secretive crypto fund he co-founded in 2017, Bankman-Fried, and FTX, the crypto exchange he co-founded in 2019 that became one of the world’s largest cryptocurrencies, have been rife with speculation about what happened to the two. transactions became intertwined, and a chain of events led to the bankruptcy of both enterprises.
In a series of high-profile media appearances this week, Bankman-Fried began offering his theory of the case: Alameda took on too much leverage to make risky investments on the FTX platform, and FTX failed to recognize and prevent it. The main claim: Bankman-Fried himself didn’t really know what Alameda was doing.
“I was surprised by how big Alameda’s position was,” Bankman-Fried said. The New York TimesDealBook Summit on Wednesday. “Alameda is not a company that I oversee on a day-to-day basis,” he said New York in an article published Thursday in the magazine. “This is not the company I run. This is not the company I have been running for the past few years. And I was not deeply aware of Alameda’s finances. I had only a cursory knowledge of Alameda’s finances.
It remains to be seen what it’s like on the “surface level” as a bankruptcy team picks through the wreckage to track what’s going on. But let’s take a look at the Bankman-Fried discussion Forbes Provides an initial basis for Bankman-Fried’s awareness of Alameda’s deals: As of January 2021, Bankman-Fried Forbes Alameda has detailed some of Alameda’s major holdings at least five times in response to questions about its net worth, including explaining the specifics of certain transactions and updating the number of FTT, Solana, and Serum tokens Alameda holds — as recently as late August.
MMost of the world’s billionaires prefer to discuss their wealth. Not Bankman-Fried, who Forbes He approached the subject for the first time in January 2021.[H]apply to outline,” he wrote in an email. Later that week, he sent several documents showing his ownership stakes in FTX (about half) and Alameda (90%), screenshots of wallets holding cryptocurrencies, and a Google Sheet listing his assets line by line. he has FTX capital and 67.8 million Solana tokens, 193.2 million FTT tokens and 3 billion Serum tokens.
Two months later, when Forbes was updating estimates for its annual World’s Billionaires list, Bankman-Fried updated the spreadsheet. Crypto prices were on the rise, plus Alameda increased its stake in FTT tokens to 195.8 million. “Managed Alameda funds, approx.” one line reads: $32,534,779,809. A separate column listing only unlocked, meaning tradable, tokens puts Alameda’s total at a more modest $14.7 billion.
Updates like these came from time to time – practically all the time Forbes he wanted them. In September 2021, Bankman-Fried added a new tab to the Google Sheet. Funds managed by Alameda grew to $37.6 billion, $16.8 billion counting only unlocked tokens. The business did some Solana trading, he explained, and the number of FTT tokens in its balance also changed. Bankman-Fried knew the details well: “[W]e used ~20mm of FTT tokens as part of the funds to buy back FTX equity from Binance (causing the drawdown) and then bought back that FTT on the market” Forbes. “So now (slightly different from a few weeks ago!), we’re back at 186,442,198 unlocked FTT (after a bit of a dip in the last rally).”
In March 2022, Bankman-Fried again updated the spreadsheet with more detailed information about Alameda’s stake. FTT holdings reduced to 176 million tokens; Solana fell to 53 million. In late August, about a month before the Bankman-Fried empire began to crumble, he left again. Forbes FTX through its net worth and FTX provides a table of capitalization of the largest US shareholders. A new tab on the Google Sheet also showed Alameda’s holdings, with its investments in Solana, Serum and FTT unchanged at 53 million, 3 billion and 176 million respectively. According to Bankman-Fried, the total value of his stake in Alameda’s funds under management: $8.6 billion, or $6.4 billion if we only count unlocked tokens. By then, there was much more going on beneath the surface, Alameda was likely in deep trouble, suffering from trading losses on highly leveraged bets.
TThe level of detail it provided to Bankman-Fried Forbes Over the years, he has shown at least some knowledge of some of Alameda’s holdings and transactions, especially in 2021, despite stepping back from hedge fund management after founding FTX in 2019. Bankman-Fried insisted for a long time. although he was a shareholder in both, the two enterprises operated independently of each other.
It remains unclear how involved he was in the Alameda operations and what conversations he had with her Forbes doesn’t necessarily indicate that he is aware of all of his hedge fund’s activities – the snapshots he posted were clearly incomplete, listing only major holdings, and he explained only a few major transactions, such as token purchases in 2021. Bankman-Fried Alameda has been struggling in recent months, she said. He declined to comment for this story.
Forbes Bankman-Fried’s net worth, which reached $26.5 billion at the end of 2021 but now looks close to zero, is largely based on the value of outside investors such as Sequoia Capital and Singaporean government fund Temasek, which it attributes to FTX and its US operations. We applied significant discounts to Bankman-Fried’s self-reported Alameda holdings. in August, Forbes pressed Bankman-Fried for details on its assets and liabilities, including Alameda’s balance sheet — both its investments and its debts. “[W]working on it!” he wrote in an email, making it likely that Alameda dug into its books at least as late as August, more than a month before he said this week that he knew what the case was about. “[W]I’ll see what I can get,” Bankman-Fried wrote later that day, “a bunch of tons spread out among the purses …” He never sent further details.