WSJ Exposes Alameda Research’s Woes Before FTX Crash

• The Wall Street Journal recently reported that Alameda Research was already a sinking ship long before Bankman-Fried launched FTX.
• The report claims Alameda Research was already in trouble before the Terra-induced crash in May 2022 and their issues were only exacerbated by the bankruptcy of FTX.
• Sam Bankman-Fried (SBF) and other FTX executives are currently facing multiple lawsuits for fraud.

The crypto winter of 2022 was a trying time for many crypto firms, with one of the biggest and most prominent exchanges, FTX, being no exception. The company had bailed out several crypto firms during the Terra-induced crash in May of 2022, only to end up filing for bankruptcy itself a few months later. This has caused many to look back at the events leading up to the bankruptcy, and a recent Wall Street Journal report has shed some light on the issues of one of the companies most closely linked to FTX, Alameda Research.

The report claims that Alameda Research was already in trouble long before the Terra-induced crash, and that the issues were only exacerbated by the bankruptcy of FTX. According to the report, Alameda Research was a walking red flag from its early days, with its founders, Sam Bankman-Fried (SBF) and other executives, facing multiple lawsuits for fraud. The report also claims that Alameda Research had been over-leveraging its trades, which led to the company being unable to meet its commitments when the crypto markets crashed.

The Wall Street Journal report also alleges that Alameda Research had been engaging in questionable trading practices, such as wash trading and spoofing, which allowed it to manipulate the markets and make a profit. Furthermore, it is alleged that SBF and other executives had been using Alameda Research’s resources to prop up FTX and its accompanying crypto firms, which only served to weaken the company further in the long run.

The report has caused many to question the role SBF and the other FTX executives had to play in the downfall of Alameda Research. With multiple lawsuits against them, it is clear that Alameda Research and FTX were inextricably linked, and the Wall Street Journal report is sure to cause further issues for the defendants. For now, the crypto community will have to wait and see what the outcome of these lawsuits will be and how they will affect both Alameda Research and FTX going forward.