FTX and Alameda Research: what no one knew

Sam Bankman Fried is now a giant in the crypto industry thanks to his two companies: FTX (his exchange platform) and Alameda Research (his trading company).

Both have established themselves as giants in the industry, making SBF powerful and well-known in the ecosystem of the crypto world, making him the world’s richest under 30 according to Forbes. 

Last year, the young California-based CEO of FTX attracted media attention for donating $5 million to support Joe Biden‘s campaign. According to the Wall Street Journal, this makes him the second largest CEO supporter of Biden after Michael Bloomberg. 

SBF’s companies: FTX and Alameda Research

FTX is a cryptocurrency exchange platform and financial services provider, in the case of the United States also for classical finance products. It is currently one of the top exchange services in the industry, both in quantity and quality of services offered. Its leveraged derivatives are popular with short-term speculators. 

Alameda Research, on the other hand, is a company that has been active in the crypto world since 2017. 

The company of SBF not only profits from the cryptocurrency sector through algorithmic trading, but also performs the typical services of a financial institution. 

Arbitrage, quantum algo-trading, “value investing” and “market making” are among the main trading strategies of Sam Bankman Fried’s company. Alameda Research is still little scrutinized in the crypto world, but as its influence grows, so do concerns about a potential market advantage.

Where FTX and Alameda Research meet

Although they are two quite distinct companies, despite seemingly traveling in two opposite directions, with two distinctly different purposes, they meet at a certain point: the balance sheet of Alameda Research.

A few days ago, the $14.6 billion assets of Sam Bankman Fried’s trading company were unveiled. Of these 14.6 billion, however, about 5.8 billion are FTT tokens, the native tokens of his FTX exchange platform. 

This was revealed by the news site Coindesk, after being in possession of and analyzing a balance sheet document from Alameda Research.

What is surprising, however, is not the amount invested or the corporate assets of Sam B Fried. Over the years he has shown himself to be an industry mogul and these numbers are almost taken for granted. 

What has been astonishing is that the world’s richest under-30, places much of his corporate assets in a sister company’s crypto. 

As of June 30, the company’s assets amounted to $14.6 billion.

$3.66b of “unlocked FTT.”
$2.16b of “FTT collateral.”
$292m of “unlocked SOL,”
$863m of “locked SOL”
$41m of “SOL collateral.”
$134m of cash and equivalents
$2b “investment in equity securities.” https://t.co/GQn22UtNsY

— db (@tier10k) November 2, 2022

Sam Bankman Fried and the new opportunities 

The tycoon of FTX and Alameda, always exhibits himself as a character who knows how to seize opportunities if he feels it is right and convenient for him and his companies.

Recently in an interview, he explained that the move away from the peak and the summer flattening of Bitcoin, and the whole bear market in general have generated a number of opportunities for SBF. The CEO of FTX has been able to acquire new companies at bargain prices, such as the $25 million to acquire the BlockFi exchange.

In the same interview, the Chief Content of Forbes, Randall Lane, asked Sam B Fried directly if he was intent on acquiring his main exchange competitor Coinbase. The CEO of FTX was not very comprehensive in his answer, but still gave hints that it might be in his plans:

“When you look in general at more retail-heavy platforms, those are platforms that we’re looking at from a collaboration or other perspective, because they’re platforms that to some extent complement what we have, which is a more institutional-heavy platform.”

SBF’s interest in Twitter

“I saw your survey on Twitter for free speech. I don’t know if you really plan to buy Twitter, but Sam Bankman-Fried has long been potentially interested in buying it to make it better. If you want it is possible to talk to him about a possible joint effort in that direction.”

This is the message that a Sam Bankman Fried consultant and FTX executive, Will MacAskill, sent directly to Elon Musk. 

Will MacAskill went on to explain what the budget was that the CEO of FTX and Alameda was willing to invest: a figure that could range between $8 billion and $15 billion for the joint venture. 

Although the CEO of Tesla and SpaceX asked various experts in the banking industry for advice on Sam Bankman Fried, they all recognized the genius of the CEO of FTX.

Elon Musk eventually decided to exclude him from the Twitter acquisition deal.

Nevertheless, in a recent interview SBF was very diplomatic toward Twitter’s new owner and his radical changes to the platform:

“I think there are a lot of positive aspects to what he’s doing.”