Media: Sam Bankman-Fried acknowledged Alameda Research’s $10 billion debt to FTX

FTX provided client funds from Alameda Research to finance risky bets, leading to the platform’s collapse. The Wall Street Journal, informed sources said.

According to them, at investor meetings, FTX Sam Bankman-Fried stated that Alameda Research had an outstanding debt to FTX of $10 billion.

The top executive described the decision to lend the trading firm using client funds as shortsighted.

Users of the platform deposited roughly $16 billion, with more than half of this amount provided to Alameda Research by FTX. Another roughly $1.5 billion was raised by the firm from external entities.

The publication recalled Bankman-Fried’s November 7 tweet asserting that FTX did not invest client funds even in such safe assets as U.S. Treasuries. He later deleted the tweet.

According to the WSJ, Alameda Research earned from arbitrage, market-making and yield farming. According to Nansen, one of the firm’s wallets associated with the company generated more than $550 million in profit since 2020.

Earlier, Glassnode drew attention to the coincidence of the start of the trend of decreasing FTX bitcoin reserves with the collapse of the Terra ecosystem.

Coin Metrics analysts suggested that a possible cause of the exchange’s collapse could be a ‘major financial aid’ it extended to Alameda Research in the second quarter of 2022.

On November 10, Bloomberg said that US regulators had begun an investigation into the relationships between the crypto platform, its US subsidiary and a ‘related’ trading firm.

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