The Bitmex co-founder, Arthur Hayes, criticized Sam Bankman-Fried, the disgraced FTX co-founder, on Friday after Bankman-Fried published his first blog post on his new Substack newsletter. “All this talk about what Alameda did is misdirection,” Hayes insisted. “It doesn’t matter how they hedged or didn’t hedge, or what dogsh** was in their portfolio.”
Bitmex Co-Founder Accuses Former FTX CEO of Avoiding Transparency
Arthur Hayes, co-founder of the cryptocurrency derivatives platform Bitmex, criticized Sam Bankman-Fried, former CEO of FTX, following a recent blog post. In the blog post, Bankman-Fried said “Alameda failed to sufficiently hedge its market exposure” and “an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent.” Hayes, a prominent member of the cryptocurrency community, has significant knowledge about cryptocurrency derivatives exchanges, as Bitmex was one of the largest since its inception in 2014.
“The exchange should never lose money if a customer gets liquidated,” Hayes tweeted on Friday. “There is no excuse [for] giving [your] hedge fund Alameda an account with liquidation turned off. All this talk about what Alameda did is misdirection. It doesn’t matter how they hedged or didn’t hedge, or what dogsh** was in their portfolio,” the Bitmex co-founder added.
Hayes then told Bankman-Fried if he truly wanted to explain what happened, he should tell the community why he thought it was a good idea to give his hedge fund an account with the liquidation feature turned off. Former Alameda CEO Caroline Ellison’s statements explain that she fully “understood that executives had implemented special settings on Alameda’s FTX.com account that allowed Alameda to maintain negative balances in fiat currencies and cryptocurrencies.”
Alameda’s Negative Balance Account: An Enigma Wrapped in a Mystery
Furthermore, Bitcoin.com News reviewed a document that allegedly belonged to Ellison that shows the former Alameda CEO had a leveraged FTX trading account that was in the red by negative $1.3 billion in May 2022. Hayes emphasized that if Alameda was removed from the equation through a legitimate liquidation, Bankman-Fried’s now-defunct exchange could still be operational. “If you had liquidated Alameda like any other FTX punter, FTX would still be operational. It’s just that simple,” Hayes tweeted. The Bitmex CEO added:
So stop talking about Alameda and tell us how you approached risk management at the FTX level. Why were some clients treated differently than others. I am keen to understand why you thought turning off liquidation on a $bn notional position was prudent.
Many people responded to the Twitter thread written by Hayes, and one person wrote: “Users paid for Alameda’s negative account equity. Shameful.” Others repeated Hayes’s sentiment, saying “it really is just that simple.” “It’s really the most basic question SBF keeps skirting around. At least he said he was sorry,” another person added.
What are your thoughts on the criticisms shared by Bitmex Co-Founder Arthur Hayes against former FTX CEO Sam Bankman-Fried? Share your thoughts in the comments section below.
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Source: https://news.bitcoin.com/bitmex-co-founder-criticizes-former-ftx-ceo-for-not-liquidating-hedge-fund-alameda/