IN-DEPTH: Secret backdoors, asset fire sales and a “personal piggy bank” too big to fail. Court documents shed new light on Alameda’s relationship with FTX. realDannyNelson reports
criminal money laundering, conspiracy and fraud charges in the U.S. His stunning fall from CEO at the top of the crypto industry to international defendant took just over one month.
Part of Alameda’s speed boost was due to its other special privileges. Because it didn’t need to have enough money to place trades, it wholly sidestepped the automatic balance check that other accounts had to clear. This gave Alameda “another significant speed advantage.” Bankman-Fried tried to hide the relationship between his “personal piggy bank” and FTX by routing money to seemingly unaffiliated bank accounts that Alameda controlled, according to the SEC. FTX used the unassuming account name “[email protected]” to track its sister company’s multi-billion dollar debts without raising eyebrows. And Alameda never told third-parties that its “loan” was from FTX.
“Given the amount that Alameda is doing, we can’t really shut it down,” he wrote, according to the CFTC.The SEC and CFTC chart Nov. 2 as the day Alameda and FTX began to unravel. On that day, the regulators said CoinDesk published anthat probed Alameda’s extensive FTT token holdings. FTT is a token issued by FTX, and Alameda had billions of dollars of FTT and other FTX-linked tokens on its balance sheet.
At the same time, Alameda traders were directed to “sell everything that could be sold” in a mad dash to “generally do anything possible to quickly obtain billions of dollars in capital to send to FTX,” the CFTC said, noting Bankman-Fried played a key role in that effort.
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