WSJ: The crisis of Alameda and FTX began a few years before the bankruptcy of the exchange

The Wall Street Journal, citing sources familiar with the situation, reported that the collapse of Alameda Research, the company of the former CEO of the FTX exchange, began long before the bankruptcy of the site.

Alameda’s first major deal was an arbitrage game in Japan, where bitcoin was sold at a higher price – the company managed to make profit from this from $10 million to $30 million. Alameda tried to convince everyone that she was making a huge income from her trading activities, but in reality big losses due to their trading algorithm, which incorrectly predicted the price movement of digital currencies. In 2018, the company lost more than half of its assets.

Despite this, Sam Bankman-Fried actively raised funds for Alameda from lenders and investors, promising a 20% return to save the firm. After that, FTX was created, and Alameda became its main market maker and was used to stimulate the growth of the exchange. On occasion, Alameda played the underdog in trades to win customers over to FTX. Also, through Alameda, the crypto exchange had access to companies of interest to it.

Previously, a group of FTX clients asked the US Bankruptcy Court to keep their names confidential because the disclosure of this information could threaten them with identity theft and pose a threat.