Sam Bankman-Fried’s trading firm, Alameda Research, allegedly traded billions of dollars from FTX customers’ accounts and leveraged the crypto exchange’s native token as collateral.
that a source claims the quant trading firm Sam Bankman-Fried founded, Alameda Research, used customer deposit from his exchange FTX in a way that went unnoticed by investors, employees, and auditors. The source claims that Alameda Research used billions of dollars from FTX users without their knowledge.
FTX’s largest client was allegedly Alameda Research. Because the assets it traded were not recorded on its own balance sheet, the hedge fund was able to conceal its activities. Instead of holding any money, FTX users loaned billions to the fund, which then used it to trade, the source said. Bankman-Fried told CNBC that: “A margin position took a huge hit.” Some of the leveraged trades that the quant fund made were secured using FTT, a cryptocurrency issued by the exchange as collateral. When a lending agreement is established, collateral is usually the borrower’s pledge to secure repayment. In this situation, Alameda allegedly borrowed from FTX, which then used its own cryptocurrency, the FTT token, as collateral.
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