Problems with FTX and Alameda are worsening the situation for crypto companies. Ongoing bankruptcy announcements have dragged Bitcoin and Ethereum to their lowest levels in recent years. However, new allegations suggest that Alameda tried to remedy its situation by opening short positions before bankruptcy.
Alameda was shorting this altcoin
Alex Mashinsky, CEO of Celsius, one of the companies that went bankrupt during the Terra crisis in May, made striking claims in his tweets dated December 3. Previously, it was rumored that Alameda took a short position on USDT. Mashinsky says the company uses Celsius’s token CEL to make up for FTX’s losses. In his statements, he said that Alameda is also manipulating other altcoins:
FTX suffers from traders using leverage on shit coins as well. FTX is using Alameda to fill the gap by sending FTT. FTX excludes Alameda from automatic liquidation resulting from FTT price drop to avoid a death spiral Alameda uses “God Mode” to short cryptocurrencies like CEL and avoid sending collateral.
FTX experiences losses from giving traders margin on shit coins
FTX uses Alameda to fill the hole by posting FTT
FTX excludes Alameda from auto liquidation from FTT price drop to avoid a death spiral
Alameda uses “God Mode” to short coins like CEL & avoid posting collateral— Alex Mashinsky (@Mashinsky) December 3, 2022
Mashinsky later said that Digital Currency Group, the company behind Genesis, was the real culprit. Digital Currency Group (DCG) is a venture capital firm focused on the cryptocurrency market. Recognized subsidiaries include Genesis, Grayscale Investments and Luno. According to Mashinsky, the trigger for the current bear market has been DCG, which funds FTX. In another tweet, he made the following statements about the subject:
Genesis/DCG should take charge of much of this bear market after recklessly lending and trading with the biggest leveraged players including:
Genesis / DCG should take responsibility for much of this bear market after recklessly lending and trading with the largest leveraged players including
$2.4B loans to 3AC
Several billion in OTC to Luna
+$1B to FTX and Alameda
Lending over $5B for leveraged GBTC sham trades https://t.co/7Uf1LDLeFv— Alex Mashinsky (@Mashinsky) December 3, 2022
SBF said it was unaware of Alameda’s condition
Founder Sam Bankman-Fried was recently featured in a high-profile interview at the DealBook Summit. When asked to account for the mixing of Alameda Research and its funds, he claimed that he was not involved in the day-to-day operations of the company:
I was deeply unaware of Alameda’s financial situation. I was only superficially aware of Alameda’s finances.
But reports suggest that Sam Bankman-Fried lied. Also, between January 2021 and August 2022, the SBF shared various documents with Forbes to prove its wealth. Forbes also requested details about his assets for its annual World Billionaires list. The former CEO of FTX also shared documents summarizing various transactions and assets of Alameda Research. The SBF now says it was unaware of Alameda’s pre-bankruptcy situation.
Reports also revealed that Alameda holds 176 million FTT and 53 million Solana. At the same time, it owned more than three billion Serum (SRM) tokens. As Cryptokoin.com reported, the Serum team announced that it would cease its activities after the crisis.
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