Sam Bankman-Fried Explains FTX-Alameda Relationship – Crypto News – Crypto News
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Sam Bankman-Fried Explains FTX-Alameda Relationship – Crypto News

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Former FTX CEO Sam Bankman-Fried is under scrutiny by prosecutors over the relationship between crypto exchange FTX and trading firm Alameda Research. SBF has reportedly made customers wire transfer money to FTX through Alameda bank accounts at Silvergate and other banks.

During the interviews With the New York Times, SBF defended itself from fraud accusations. Also, get completely sidelined himself from Alameda, saying “I wasn’t running Alameda.”

Sam Bankman-Fried Denies Oversight of Alameda

SBF pointed out that it was not aware of the relationship between FTX and Alameda Research, nor the sizable amount of funds transferred between FTX and Alameda.

Alameda had nearly 10% leverage a year ago. However, the number of market crashes drives the value of those assets down and the leverage up. Sam Bankman-Fried said more than $10 million was “wiped off in a matter of days,” leaving FTX unable to liquidate that position and generate the money owed.

Commenting on the commingling of funds, SBF said “I didn’t knowingly commingle funds.” However, he agreed with big positions at Alameda, which was another failure of oversight on his part. Furthermore, he believes Alameda has margin positions with crypto lending and lending firms. Alameda moved those positions to FTX after the crypto lending firm collapsed due to liquidity issues.

SBF denied knowing what was happening between FTX and Alameda until last month. He cited conflict of interest as reasons for not having a part in operations, finances, and decision-making at Alameda.

Commenting on missing funds and FTX and FTX US wallets exploit, he admitted the transfer of some funds by FTX’s US team to custody wallet and another portion taken by Bahamian regulators, Furthermore, he agreed that FTX has been hacked with funds siphoned off by unknown persons.

How FTT Token Become a Key Part of the Relationship

FTX Token (FTT) allowed customers to use it and trade their crypto assets on the crypto exchange. Alameda was the main market maker of FTT tokens, buying and selling a majority of FTT. In fact, FTX offered trading discounts for using FTT.

Alameda began using its FTT holdings as collateral for more loans from crypto lenders to facilitate its trading activities. Larry Fink, CEO of BlackRock, also believes in FTT tokens. as the reason behind the collapse of FTX.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

The content presented may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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