Cryptos: How Alameda Research’s 30 Traders Made FTX Fall

Alameda Research, the Sam Bankman-Fried firm, promised at its inception, in 2017, performances “à la Madoff”, regular and without risk. A long calm river. While admitting that the crypto market was “exciting and dangerous”, the trader ensured a return of 15% per year. He told prospective investors that they could withdraw their money at any time. Those who entrusted him with more than $50 million could expect an even higher return. In 2018 during the market dive it had risen between 4% and 10% per month. The “LTCM of cryptos” had something to impress investors. With a capital of 5 million dollars, they aimed to raise 200 million dollars. In the end, it will only be fifty million a year later. But eventually the trading company will have only one demanding and all-powerful customer-shareholder, Sam Bankman-Fried.

Sam Trabucco, the former co-director of Alameda Research, follower of Blackjack with Caroline Ellison, had provided some information about this mysterious ATM before his departure in August. At the beginning, in 2018 and 2019, it practiced arbitrage without betting on the rise or fall of the market. She did “market making”, she bought and sold cryptos to investors by catching small price differences. Like other trading firms, it also took advantage of the price differences that can exist on a crypto listed in different countries, especially in Korea and Japan. This is why she had left California to settle in Tokyo.