Sam Trabucco stepped down as CEO at trading company Alameda Research in August. As he left, he said, “But if I’ve learned one thing in Alameda, it’s how to make good decisions. This is the right decision for me,” he said. But now all eyes are on him again because the former CEO of FTX-Alameda made big decisions that led to the downfall of Alameda and FTX. Also, he resigned just a few months before FTX went bankrupt.
Who is Sam Trabucco?
Sam Bankman-Fried’s cryptocurrency exchange FTX shook the entire market with an unexpected bankruptcy. First, the exchange suspended withdrawals, albeit slowly. After that, it declared bankruptcy just 10 days later. This came after a report that Alameda Research, originally owned by FTX, went bankrupt. There were signs that Alameda Research, which had $8 billion in liabilities and $14.6 billion in assets, had collapsed, CoinDesk reported in October. Alameda Research is basically a hedge fund affiliated with FTX.
Sam Trabucco was managing this fund. He also probably held most of his illiquid altcoins during his tenure. This included a large amount of FTT, a swap token of Alameda’s sister company FTX. Trabucco joined Alameda in 2019 after working for a time as a trader on the bond desk of Susquehanna International Group. His friend and boss, Bankman-Fried, appointed him to Alameda in October 2021 with the aim of removing him from FTX. Thus, he started working with Caroline Ellison as co-CEO. Trabbucco said in a statement he gave at the time:
“SBF is not very interested in day-to-day operations in Alameda. Caroline and I have been managing responsibility there for quite some time.”
He was an old friend of Sam Bankman-Fried.
Sam Trabucco met former FTX CEO Bankman-Fried in 2010 at a five-week math camp. He remembered that Bankman-Fried had hardly slept during their stay. After this camp, they continued their communication. The two reunited at the Massachusetts Institute of Technology (MIT), where Trabucco studied undergraduates in mathematics and computer science. As co-CEO, Trabucco enabled Alameda to detach itself from its initial structure as a market maker for low-volume cryptocurrencies.
Is Trabucco linked to the FTX crash?
Sam Trabucco helped Alameda expand beyond the relatively low-profit business into riskier trading strategies. For example, he said, Alameda traders are starting to explore yield farming in decentralized finance (DeFi). According to Trabucco’s account, the trading company was influenced by people like Elon Musk tweeting that drove up the price of meme coins. On top of that, the firm began taking “huge” profits by placing highly leveraged bets on assets like Dogecoin.
The full story is not yet known. However, emerging evidence suggests that Alameda suffered a series of losses at the start of the crypto market downturn. Co-CEO Ellison did not include Trabucco in the list of people who knew about the decision to send client funds to Alameda. In August, Trabucco announced his resignation and became a consultant to the company. On November 8, when FTX agreed to sell itself to Binance, Trabucco tweeted, “Lots of love to all”. He then said that he “hopes the road ahead will be brighter”.
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