FTX Founder Contemplated Shutting Down Alameda Research Before Fraud Allegations

Comments
Loading...
Zinger Key Points
  • Bankman-Fried described Alameda as both a major success and a brief failure in his life.
  • He attributed negative publicity surrounding Alameda to FTX competitors deflecting from their issues.
  • Get Monthly Picks of Market's Fastest Movers

Amid the ongoing trial of FTX FTT/USD founder Sam Bankman-Fried and allegations of misusing customer funds, newly revealed content from an ongoing court case indicates that the founder contemplated discontinuing Alameda Research's operations in 2022.

What Happened: During the trial, Bankman-Fried was quoted as saying, “For the past few years, the FUD around Alameda’s relationship with FTX has been too much of a burden to justify its existence.”

The crypto industry, with its rapid advancements and evolving dynamics, will be a focal point of discussion at the upcoming Benzinga's Future of Digital Assets conference on Nov. 14. Insights from such revelations are expected to shape the discourse on the future of digital assets.

Bankman-Fried further pointed fingers, stating, “This FUD has been largely spread by competitors of FTX, looking to distract from their problems.”

While Bankman-Fried had aspirations to evolve Alameda into an infrastructure development and investment entity, he asserted in the unpublished posts that it would halt its active trading activities.

"Going forward, Alameda will continue to not do nefarious trading activity on FTX, because it won’t do any trades on FTX. Or anywhere else,” he said.

Also Read: Caroline Ellison Drops Bombshell - Bankman-Fried Wanted To Be President

Alameda's reputation was marred by persisting speculations that it engaged in trading that was not in the best interests of FTX's clientele, enjoying undue benefits in the process.

Further fueling concerns, Alameda's co-founder, Caroline Ellison, provided testimony claiming deliberate balance sheet manipulations to project a "less risky" image to investors.

She also alleged that vast sums from FTX's customer accounts were loaned out under Bankman-Fried's directive.

Read Next: EXCLUSIVE - Bitrue Strategy Advisor Warns US Will 'Lose Talent' Due To Crypto Regulations

Meet and engage with transformative Fintech business leaders and investors at Benzinga's exclusive event  Fintech Deal Day. Tickets are going fast  get yours!

Market News and Data brought to you by Benzinga APIs

Posted In:
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!