Former FTX CEO, Sam Bankman-Fried, had composed a draft Twitter thread discussing the potential shutdown of his hedge fund, Alameda Research. This thread, drafted in September 2022, sheds light on Bankman-Fried’s contemplation of announcing the closure of Alameda Research, the trading firm he co-founded, just two months before FTX’s collapse.
“Alameda Research is a buyer when no one else is ready to buy–when markets are wild and volatile and prices are crashing and capital is scarce.”
– Sam Bankman-Fried
During a trial, FTX co-founder Gary Wang testified that Bankman-Fried was anxious about an upcoming article that would expose the close links between FTX and Alameda Research. In the draft thread, Bankman-Fried praised Alameda Research as a vital player in the ecosystem, emphasizing its role as a significant global source of liquidity and guidance for the industry, even after his departure.
Addressing Failures and Dismissing Claims
However, Bankman-Fried did acknowledge the biggest failure of Alameda Research in the draft thread, which was the loss of millions of dollars’ worth of Ripple tokens due to accounting negligence in February 2018.
“In February 2018, we got lazy–and our accounting was lazy–and we lost most of what we’d made.”
– Sam Bankman-Fried
Bankman-Fried utilized this thread as an opportunity to address the narrative propagated by competitors, claiming excessive ties between Alameda and FTX. He dismissed these claims as distractions, emphasizing their inaccuracy and highlighting that their competitors were deflecting attention from their own problems.
Halting Closure Plans
Interestingly, Bankman-Fried’s plan to wind down Alameda Research was halted due to the firm’s substantial debt of $14 billion owed to FTX. When informed of this inability to shut down Alameda, Bankman-Fried acknowledged the situation, ultimately deferring the closure.
“Alameda Research is dead. Long live FTX.”
– Sam Bankman-Fried
However, Bankman-Fried never executed the closure of Alameda Research as initially planned.
On day six of the trial, Gary Wang concluded his testimony, once again admitting to committing crimes alongside Bankman-Fried. Last week, Wang confessed to wire fraud, revealing that he and Bankman-Fried engaged in financial crimes and deceitful practices that ultimately led to the collapse of the cryptocurrency trading platform.
As the Chief Technical Officer at FTX and co-owner of Alameda Research, Wang disclosed that they illegally withdrew a staggering $8 billion from FTX funds through Alameda Research, all under the direction of Bankman-Fried himself.
