Tag: Alameda Research

FTX Group and Alameda Research Recover Crypto Assets

by Blockchain News

After filing for bankruptcy and coming under new management, FTX Group and its affiliated companies, including Alameda Research, have been actively trying to recover funds from firms they previously sent crypto to.

FTX reached a settlement with hedge fund Modulo Capital on March 23, allowing it to recover $460 million previously invested in the fund. On May 4, FTX filed a motion to claw back $4 billion it allegedly lent to bankrupt crypto lending firm Genesis Global.

Meanwhile, Alameda Research recently received approximately $60 million worth of digital assets from OKX as part of a recovery effort to pay back customers of FTX. According to data from crypto analytics platform Arkham Intelligence, the funds included Mask Network (MASK) tokens and the Tether (USDT) stablecoin, and were spread out among 16 separate transactions.

Alameda Research currently holds over $284 million worth of assets in its crypto wallets, with its largest holdings being USDT, BitDAO (BIT), Ether (ETH), and Stargate Finance (STG).

FTX and Alameda Research’s recovery efforts come after a tumultuous period that saw the companies file for bankruptcy in November following a liquidity crisis. Alameda Research’s former CEO, Caroline Ellison, has been charged with fraud for allegedly colluding with former FTX CEO Sam Bankman-Fried to misappropriate FTX customer funds.

In summary, FTX Group and Alameda Research are making progress in recovering lost crypto assets, with FTX reaching a settlement with Modulo Capital and seeking to claw back funds from Genesis Global, while Alameda Research received $60M from OKX in a recovery effort. The recovery efforts come after FTX Group and its affiliated companies filed for bankruptcy in November following a liquidity crisis.

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OKX Sends $60M to Alameda Research

by Blockchain News

On May 9, crypto exchange OKX transferred approximately $60 million worth of digital assets to wallets associated with failed hedge fund Alameda Research. According to data from crypto analytics platform Arkham Intelligence, the funds were spread out among 16 separate transactions and included approximately 337.9 million Mask Network (MASK) tokens worth $1.3 million, as well as $57.77 million worth of the Tether (USDT) stablecoin.

Alameda Research currently holds over $284 million worth of assets in its crypto wallets, with its largest holdings being USDT, BitDAO (BIT), Ether (ETH), and Stargate Finance (STG).

It is believed that the funds sent by OKX may have been part of a recovery effort to pay back customers of its sister company FTX. On March 30, OKX announced that it planned to return approximately $157 million it held on behalf of FTX and Alameda, which it had frozen in November to safeguard them. FTX had filed a motion on March 30 to force OKX to release the funds to pay back creditors, which OKX said it “welcomed.”

After filing for bankruptcy and coming under new management, FTX and Alameda Research have been aggressively trying to recover funds from firms they previously sent crypto to. On March 23, FTX reached a settlement with hedge fund Modulo Capital, allowing it to recover $460 million previously invested in the fund. On May 4, FTX filed a motion to claw back $4 billion it allegedly lent to bankrupt crypto lending firm Genesis Global.

FTX Group and roughly 130 companies under its umbrella, including Alameda Research, filed for bankruptcy in November after the crypto exchange suffered a liquidity crisis. Alameda Research’s former CEO, Caroline Ellison, has been charged with fraud for allegedly colluding with former FTX CEO Sam Bankman-Fried to misappropriate FTX customer funds. She pleaded guilty to the charges on Dec. 22. However, Bankman-Fried has pleaded not guilty and has sought to dismiss some of the charges against him.

In summary, OKX sent $60 million worth of digital assets to Alameda Research as part of a recovery effort to pay back customers of FTX. Alameda Research currently holds over $284 million worth of assets, including USDT and ETH. FTX and Alameda Research have been actively recovering funds from firms they previously sent crypto to after filing for bankruptcy in November.

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FTX US and Alameda Research File Complaint Against FTX Digital Markets

by Blockchain News

In March 2023, legal teams representing FTX US and Alameda Research filed a complaint against FTX Digital Markets, a Bahamas-based company, alleging that it was a fraudulent enterprise used to obscure the question of the firm’s ownership. The complaint was filed with the United States Bankruptcy Court for the District of Delaware, where FTX debtors stated that FTX Digital Markets, also known as FTX DM, and the joint provisional liquidators had claimed that the Bahamian arm was the “constructive owner” of FTX.com’s fiat and crypto assets, as well as other intellectual property.

The legal teams claim that these claims made by FTX DM are baseless and will harm FTX.com customers and all other creditors of the FTX Debtors as the company continues with bankruptcy proceedings in the United States. The filing states that the JPLs’ claim to ownership of FTX.com’s property is based mainly on constructive, equitable, and other non-documentary arguments that depend upon the false premise that FTX DM was the center of the FTX Group. The filing further states that FTX DM was only a short-lived provider of limited “match-making” services for customer-to-customer transactions on the cryptocurrency exchange built, owned, and operated by Debtor FTX Trading, its immediate corporate parent.

The complaint filed by FTX US and Alameda Research asserts that FTX DM was a shell entity used to conceal the issue of the firm’s ownership, and its claims to ownership of FTX.com’s property are unfounded. The legal teams claim that FTX DM was not the center of the FTX Group, as the company only provided limited match-making services for customer-to-customer transactions. The filing also asserts that FTX DM’s claims to ownership will harm FTX.com customers and all other creditors of the FTX Debtors as the company continues with bankruptcy proceedings in the United States.

The legal battle between FTX US, Alameda Research, and FTX Digital Markets is ongoing, and it remains to be seen how the bankruptcy court will rule in this case. However, the complaint filed by FTX US and Alameda Research raises serious questions about the ownership of FTX.com’s assets and the claims made by FTX DM. It is likely that this case will have significant implications for the cryptocurrency industry, as it highlights the importance of transparency and accountability in the sector.

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FTX debtors report over $4 billion in scheduled assets

by Blockchain News

FTX, the cryptocurrency exchange founded by Sam Bankman-Fried, filed for Chapter 11 bankruptcy protection in November 2022 following allegations of fraudulent activities. In a recent filing with the United States Bankruptcy Court for the District of Delaware, FTX debtors reported more than $4 billion in scheduled assets across various company silos as of November 2022.

The report submitted to the committee of unsecured creditors detailed the scheduled assets and claims of the company. The West Realm Shires silo, which includes FTX US and Ledger X, FTX.com, Alameda Research, and FTX Ventures, had roughly $4.8 billion in scheduled assets and $11.6 billion in scheduled claims.

According to the filing, Alameda Research held the majority of scheduled assets at approximately $2.6 billion. However, the report noted that the company had “potentially material claims that have been filed as undetermined,” suggesting that the actual value of Alameda’s assets could be even higher.

FTX.com had over $11.2 billion in scheduled claims, but claims from FTX Ventures were undetermined. The report also revealed that the data surrounding cryptocurrency holdings or transactions was limited. While the debtors reported more than 53 million FTX Tokens collateralized loans, including Bitcoin, Ether, XRP, and USD Coin, they stated that “additional tracing of wallet and blockchain activity remains an ongoing matter.”

The debtors’ report also noted that an investigation into crypto transactions as part of payments to FTX company insiders was ongoing. The former CEO of FTX, Sam Bankman-Fried, received more than $2.2 billion of the payments, according to the report.

In addition to the bankruptcy case, Bankman-Fried is facing both criminal and civil cases for his alleged involvement in fraudulent activities at the company.

The news of FTX’s bankruptcy and subsequent investigations have raised concerns about the transparency and security of the cryptocurrency industry. However, the company’s scheduled assets of over $4 billion suggest that FTX was a significant player in the crypto market, and the ongoing investigations will shed more light on the company’s operations and dealings.

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Stargate Foundation advised against reissuing STG token

by Blockchain News

In March 2022, Alameda Research, the former cryptocurrency trading firm, purchased the entire STG auction for $25 million. However, in November of the same year, FTX declared bankruptcy, following which FTX and Alameda’s wallets were hacked for roughly $500 million. The liquidators eventually transferred all assets to new wallets.

In light of these events, Stargate Foundation has proposed reissuing the STG token to move the funds from the potentially compromised wallet to a safer one. However, FTX liquidators have rejected this proposal citing concerns that such a move would violate the automatic stay and could result in legal repercussions.

Stargate DAO maintains that the liquidators’ concerns are unfounded and that reissuing the STG token would not violate the automatic stay. Despite the efforts of exchanges, protocols, and external parties to ensure the security of funds, the foundation is standing by its recommendation against reissuing the STG token due to the opinion of FTX liquidators.

Stargate Foundation is a decentralized autonomous organization (DAO) focused on developing decentralized technologies and solutions. It is built on a blockchain-based platform and is run by a community of individuals who hold STG tokens.

The STG token is the native token of Stargate Finance, a decentralized finance (DeFi) platform that allows users to earn interest and other rewards by providing liquidity to various protocols. The token is used to facilitate transactions on the Stargate Finance platform and is also used as a governance token for voting on proposals and decisions related to the platform’s development and operations.

The bankruptcy of FTX and the subsequent hack of its and Alameda’s wallets have raised concerns about the security of the STG tokens held by the liquidators. In response, Stargate Foundation proposed reissuing the tokens to move the funds to a safer wallet.

However, FTX liquidators have expressed concerns that such a move could violate the automatic stay and result in legal repercussions. The automatic stay is a legal injunction that prevents creditors from collecting on debts or seizing assets of a debtor who has filed for bankruptcy.

Stargate DAO maintains that reissuing the tokens would not violate the automatic stay as the tokens are not considered assets of the debtor but rather a digital asset governed by smart contracts. The DAO argues that the liquidators’ concerns stem from a lack of understanding of how smart contracts work and how they interact with the STG token to secure the funds.

Despite this disagreement, Stargate Foundation is standing by its recommendation against reissuing the STG token, citing the opinion of FTX liquidators as a significant factor in its decision. The foundation recognizes the importance of maintaining trust and confidence in the Stargate Finance platform and is taking all necessary measures to ensure the security of its users’ funds.

In conclusion, the Stargate Foundation’s recommendation against reissuing the STG token highlights the importance of transparency and communication in the DeFi space. The incident also underscores the need for clear guidelines and regulations to ensure the security of decentralized finance platforms and protect investors’ interests.

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FTX Continues to Move Funds Amid Ongoing Investigations

by Blockchain News

FTX, a cryptocurrency exchange, has reportedly moved around $145 million in stablecoins across various platforms, according to Lookonchain. Three wallets associated with FTX and its subsidiary, Alameda Research, transferred 69.64 million Tether (USDT) and 75.94 million USD Coin (USDC) to custodial wallets on platforms like Coinbase, Binance, and Kraken. FTX and Alameda are currently facing demands to return funds to different groups of investors as the cryptocurrency exchange continues to grapple with ongoing investigations and lawsuits.

The FTX bankruptcy case has been ongoing for some time, with the troubled exchange already recovering $5 billion in cash and liquid cryptocurrencies by January 2023, according to FTX attorney Andy Dietderich. However, the total liabilities of the exchange are said to exceed $8.8 billion.

In the latest development in the FTX bankruptcy case, Alameda Research sold its remaining interest in venture capital firm Sequoia Capital to a company owned by the government of Abu Dhabi for $45 million. Meanwhile, Alameda Research filed a lawsuit against Grayscale Investments in the Court of Chancery in Delaware seeking to “unlock $9 billion or more in value for shareholders of the Grayscale Bitcoin and Ethereum Trusts and realize over a quarter billion dollars in asset value for the FTX Debtors’ customers and creditors,” according to a statement.

As lawsuits and investigations continue to pile up against FTX, some plaintiffs requested the consolidation of lawsuits against the bankrupt exchange. However, United States District Judge Jacqueline Corley recently denied the request, stating that the defendants have not yet been allowed to respond.

FTX was founded in 2019 by Sam Bankman-Fried and Gary Wang and has quickly become one of the largest cryptocurrency exchanges by trading volume. The exchange offers a range of crypto trading products, including futures, options, and leveraged tokens. The exchange has also attracted significant investment, with firms like Paradigm, Sequoia Capital, and Thoma Bravo investing in the exchange.

However, FTX has faced a series of setbacks in recent months. In December 2021, the exchange suffered a security breach, leading to the theft of $95 million worth of cryptocurrencies. The exchange was also hit with a lawsuit in January 2022 by a group of investors claiming that FTX and its executives misled investors about the exchange’s financial health.

FTX’s troubles have continued to mount, with the exchange facing investigations by the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over allegations of market manipulation and insider trading. In February 2022, FTX was also hit with a class-action lawsuit by investors alleging that the exchange engaged in illegal market manipulation.

In response to the lawsuits and investigations, FTX has hired a team of high-profile lawyers and public relations experts to defend the exchange and its executives. However, the ongoing investigations and lawsuits continue to cast a shadow over the future of the cryptocurrency exchange.

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FTX to Sell Remaining Interest in Sequoia Capital to Abu Dhabi Sovereign Wealth Fund

by Blockchain News

According to the papers filed with the court, Alameda Research, the investment division of FTX, has reached an agreement to sell the company’s remaining stake in Sequoia Capital to Al Nawwar Investments Company Ltd, which is controlled by the government of Abu Dhabi. The transaction is valued at $45 million, and its completion is anticipated by the 31st of March, provided that the Delaware bankruptcy judge John Dorsey gives his consent. FTX made the decision to enter into the agreement with Purchaser because Purchaser had a more attractive offer and was capable of carrying out the selling transaction in a shorter amount of time.

The remaining stake that FTX has in Sequoia Capital has been put up for sale as part of the company’s ongoing attempts to sell its investments and satisfy its financial obligations to its creditors. Previously, Dorsey gave his blessing for the firm to sell certain assets, such as LedgerX, Embed, FTX Japan, and FTX Europe. This allowed the company to go through with the sale.

After being sued by Alameda Research for unpaid loan repayments, Voyager Digital has decided to put aside $445 million in response to the lawsuit. Dorsey has given his blessing to the move, and as a result, the firm will have to put the money away in order to pay off its debt.

The recent developments in the bankruptcy case involving FTX bring to light the persistent difficulties that cryptocurrency exchanges must overcome and the need of preserving their financial stability. Since the cryptocurrency sector is expected to continue expanding in the next years, it is essential that businesses place a high priority on openness and accountability in order to safeguard the interests of creditors and investors. The decision by Voyager Digital to put aside $445 million and the sale of the remaining shareholding held by FTX in Sequoia Capital both reflect a commitment to financial discipline and might assist to recover trust in the sector.

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FTX secretly lent Alameda Research $65B

by Blockchain News

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The New York Public Service Commission (PSC) was sued by environmentalists on January 13 for allowing the takeover of a bitcoin mining factory that was located within the borders of the state. According to the complaint, the Public Service Commission broke state law when it approved the takeover.

The state Public Service Commission (PSC), which is responsible for regulating public utilities, reportedly gave its approval in September of 2022 for the conversion of the Fortistar North power plant into a cryptocurrency mining facility. This was reported by The Guardian. The Public Service Commission is the agency that is in charge of regulating public utilities.

The Canadian cryptocurrency mining company Digihost had planned to acquire the facility, which is located in Tonawanda, a city that is less than sixteen kilometers from Niagara Falls. Tonawanda is a city that can be found in the state of New York.

The complainant’s main point is that the authorization violates New York’s climate legislation that was enacted in 2019, and this is what they consider to be their strongest argument.

The Climate Leadership and Community Protection Act (CLCPA) has a number of objectives, one of which is to cut the state’s emissions by 85 percent by the year 2050. This is just one of the many objectives. This is merely one of the many objectives that the act seeks to achieve. Another one of the goals is to completely do away with emissions produced by the electricity industry by the year 2040.

Earthjustice is the organization that will be representing the Sierra Club and the Clean Air Coalition of Western New York in this case. 

The organization known as Earthjustice is one that does not make a profit. In the complaint, they are making the argument that the Fortistar plant was only operated during the periods of time when there was a significant demand for power. For illustration, they are using instances in which there was severe weather as a case study.

If, on the other hand, it were to be converted into a facility for the mining of cryptocurrencies, it would be operational at all hours of the day and night, which would result in an increase in the emissions of greenhouse gases of up to 3,000 percent. Activists are of the opinion that environmental assessments need to be carried out whenever the state of New York analyzes proposed new projects.

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Alameda Research Problems Precede FTX For Sam Bankman-Fried

by Blockchain News

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Alameda Research, the now-defunct cryptocurrency trading business, was dangerously close to failing in 2018, far before FTX came into the scene, according to new investigations that investigate Sam Bankman-Fried and the exchanges that he caused to fail.

A study that was published in The Wall Street Journal and cited former workers stated that Alameda had significant financial losses as a result of the trading algorithm that it used. The program was developed to execute a high volume of transactions in a short amount of time in an automated fashion. Tthe company was losing money because of its incorrect predictions on how prices would fluctuate.

The decline in value of the XRP token in 2018 caused Alameda to lose approximately two-thirds of its assets, and the company came within a hair’s breadth of going out of business. Reports indicate that Bankman-Fried was successful in saving the trading company by soliciting financial support from lenders and investors and assuring them of profits of up to twenty percent on their investments.

Later in the month of April 2019, FTX was introduced with the intention of providing institutional investors with a secure refuge.

Bankman Fried leveraged Alameda as a growth engine with the introduction of the FTX, when the trading business became the primary market maker for the exchange. This allowed Bankman Fried to continue its expansion.

Some individuals who are knowledgeable with Alameda’s strategies assert that the exchange has on occasion taken the losing side of a bargain in order to attract customers.

In a previous statement, Bankman Fried said that Alameda and FTX have always functioned separately. However, a new complaint filed by the United States Securities and Exchange Commission (SEC) indicates that this is not the case. During the course of the case, it was discovered that Bankman Fried had given instructions to develop a piece of code in order to acquire an unfair advantage.

Regardless of the amount of collateral that Alameda put up with the exchange, the code would allow it for the company to keep a negative balance on the FTX. The Alameda has always been a ship that was doomed to sink from the very beginning.

However, Bankman Fried not only saved it in 2018 with borrowed money but also utilized it afterwards to construct the now-defunct FTX crypto exchange and fuel its expansion. In 2018, Bankman Fried rescued it with borrowed cash.

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Bankman-Fried May Plead Next Week Before Judge Lewis Kaplan In NY Federal Court

by Blockchain News

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According to a report published by Reuters on December 28 that cited court records, former CEO of the FTX cryptocurrency exchange Sam Bankman-Fried is scheduled to appear in court on the afternoon of January 3 to enter a plea on two counts of wire fraud and six counts of conspiracy related to the failure of the FTX cryptocurrency exchange.

In Manhattan, Bankman-Fried is scheduled to appear in front of District Judge Lewis Kaplan. After the initial judge on the case, Ronnie Abrams, was forced to disqualify herself because of links between FTX and the Davis Polk & Wardwell law firm, where her husband is a partner, Judge Kaplan was appointed to handle the case on December 27.

In the year 2021, the company offered consulting services to FTX.Kaplan is well-known for his unpretentious demeanor and his skillful management of the proceedings that take place in the courtroom. In 1994, President Bill Clinton of the United States nominated Kaplan for the position of Supreme Court Justice.

Before his arrest, Bankman-Fried expressed his disbelief on multiple occasions that he should be held criminally liable for the actions he took while serving as CEO of FTX. He claimed that the “unknowingly commingled funds” of customers of Alameda and FTX were the result of a simple accounting error that he committed.

“I don’t believe any such comments to be believable,” John Ray, who succeeded Bankman-Fried as CEO of FTX, testified during a hearing held by the Financial Services Committee of the United States House of Representatives.

Bankman-Fried is presently under house arrest in California with his parents as he awaits the outcome of his appeal of his $250 million bail, which includes a portion of the equity in his parents’ home.

Evaluation and therapy for mental health disorders as well as substance misuse were among the other prerequisites for Bankman-release Fried’s from custody.

Caroline Ellison and Gary Wang, both members of his inner circle at FTX and the related trading firm Alameda Research, have pleaded guilty to the charges against them and have agreed to cooperate with the prosecution, according to an announcement made by Damian Williams, the United States Attorney for the Southern District of New York, on December 22.

Nishad Singh, a former director of engineering at Alameda Research, and Sam Trabucco, a former co-CEO of Alameda Research alongside Larry Ellison who resigned on August 24, have not been charged as of this time. Bankman-close Fried’s allies Nishad Singh and Sam Trabucco were both fired on August 24.

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