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Sam Bankman-Fried’s Alameda Research troubles predate FTX: Report

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Sam Bankman-Fried’s Alameda Research troubles predate FTX: Report

Alameda Research

Sam Bankman-Fried’s Alameda Research Trouble Long Before FTX: Report

Sam Bankman-Fried (SBF) is a notable figure in bitcoin and cryptocurrency circles and is the CEO of Alameda Research, a quantitative trading firm. After a recently published report, however, it has come to light that Bankman-Fried’s Alameda Research has had trouble in the past ahead of its merger with FTX.

Troubles for Alameda Research

The report, published by Financial Times alleges a pattern of employee issues and complaints, long before the merger with FTX was announced. This included:

  • Gross Underpayment: Alameda Research allegedly paid its employees far less than other comparable companies, particularly those based in developed countries.
  • Exploitation: There have been reports that Alameda Research had employees working six days a week, with sporadic bonuses and salary increases.
  • Misinformation: Employees were allegedly deceived by Bankman-Fried and told that FTX offered higher compensation packages than other companies.

Reactions to the Report

SBF and his team have been given a wave of criticism after the report was released. However, Bankman-Fried has responded to the allegations in an open letter, stating:

  • Working in Good Faith: SBF strongly denies the allegations and claims Alameda Research has always worked in good faith and strived to ensure their employees are properly compensated.
  • Legal Action: Bankman-Fried has made sure to emphasize that legal action has been taken against those who have made ‘false and defamatory’ claims.

The financial implications of Bankman-Fried’s troubles are unclear for now. What is clear however, is that this report has certainly given rise to eyebrows and will certainly cause some to rethink their support for SBF and his team.

In recent weeks, Sam Bankman-Fried’s Alameda Research has been at the center of controversy following reports of improper trading activities. Now, according to a new report, the troubles at Alameda Research may predate its launch of FTX, the crypto derivatives exchange backed by Bankman-Fried.

The report, prepared by CompliANTech, indicated that there were red flags at Alameda Research in the months before its launch of FTX in April 2019. These issues may have led to its current troubles. Specifically, the report stated that Alameda Research failed to comply with applicable market manipulation regulations and therefore put itself at risk of significant penalties or other sanctions.

The report further detailed a number of events at Alameda Research prior to the launch of FTX that put it at risk of violation of market regulations. Some of these events included the manipulation of trading volumes, the exploitation of market information, and the use of wash trading. The report also noted that while these activities may have been done in order to make Alameda Research appear to have more trading activity than it actually did, they also exposed the company to regulatory scrutiny.

The reports findings indicate that the troubles at Alameda Research may have begun well before the firm launched the FTX exchange. While this does not necessarily excuse any violations of regulations that may have taken place, it does provide a context for the current controversies.

Going forward, Alameda Research will need to work to ensure that it is strictly adhering to trading regulations. Only then will it be able to put this scandal behind it and continue to serve as a leader in the crypto derivatives space.

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