Alameda pattern of trading FTX listings ‘seems not coincidental’

Alameda Research loaded up on tokens before FTX listed them, potentially gaining an advantageous market position as a result, the CEO of Argus said.

Whether Alameda subsequently traded those tokens remains cloudy and part of an “incomplete picture, as most of their selling is done off-chain,” Argus co-founder and CEO Owen Rapaport told The Block via email, adding, “We can’t really conclude to what extent they sell all their tokens or not — but given the timing of their market entrance shortly before listings, it seems not coincidental.”

In the 12 months following March 2021, Alameda Research stockpiled tokens before they were listed by sister company FTX, the exchange, as first reported by the Wall Street Journal, which cited an Argus investigation. Public Ethereum blockchain records available to Argus indicated that Alameda possessed around $60 million allocated in 18 tokens before eventual FTX listings.

Alameda and FTX now fall under increasing pressure as agencies seek to better understand alleged mishandling of consumer funds, and the exact nature of the relationship between the companies founded by Sam Bankman-Fried.

Alameda has since shuttered, and FTX filed for Chapter 11 bankruptcy protection last week after the exchange paused withdrawals. The exchange’s new CEO called on remaining staff for support as the company sorts out insolvency and how to plug an $8 billion hole in the books.  

The ensuing liquidity crunch from FTX’s abrupt closure caused major upheaval as a number of industry players found themselves either unable to withdraw balances on the FTX exchange, or directly materially exposed to FTX shares and FTT tokens.

SBF is working with regulators and bankruptcy officials, he said in an interview with the New York Times, where he explained away his earlier cryptic tweets as improvisation.

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