SBF Admits Alameda Was Given Special Treatment

SBF News:

SBF’s trading company Alameda Research was provided with oversized borrowing limits compared to other FTX clients.

He did not specify how large the limits were compared to other clients but raised the possibility that they would have continued even after FTX was established. Alameda had access to high levels of FTX lending when Sam Bankman-Fried launched the crypto exchange. He said this in an interview with the Financial Times published on Saturday.

The origins of the large borrowing limits stemmed from Alameda’s role as the main liquidity provider to FTX at its inception before other financial groups expressed interest, he said.

“If you go back to 2019 when FTX first launched, at that point Alameda had 45 percent of the volume or something on the platform,” SBF said in an interview. “It was basically a situation where if Alameda’s account ran out of capacity for new positions, it would lead to risk issues for the platform because we didn’t have enough liquidity providers. I think it had quite a lot of limitations because of that.”

The discredited founder said Alameda’s liabilities to FTX were about $10 billion at the time of its bankruptcy. He also added Alameda accounted for only 2% of the trade volume on FTX, by 2022.

Since FTX filed for bankruptcy on November 11 of this year, in the United States this is the latest admission made to the media by the co-founder and former CEO, Sam Bankman-Fried.

On Wednesday, SBF told the New York Times that “he messed up big.” In the same interview, he took responsibility for Alameda’s research and FTX link, citing that he overlooked what was going on. In an interview with ABC News on Thursday, Bankman-Fried confessed about not spending any time learning and doing risk management.

FTX collapse sent shock waves across the crypto market. SBF has been under investigation by the Securities and Exchange Commission for fraud.

Shourya is a crypto fanatic who has developed interest in Business Journalism in the past few years. Currently, working as a writer with Coingape, Shourya is also an avid reader. Apart from writing, you can find her attending poetry shows, exploring cafes and watching cricket. As she says, “dogs are my home,” her first rescue of a dog was at the age of 7! She has constantly been speaking up for mental health and the rainbow pride.

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