FTX founder Sam Bankman-Fried's lawyers deny allegations that SBF attempted to influence former Alameda Research CEO Caroline Ellison.

Alameda Research Had No Signs of a Collapse

  • Baradwaj claimed Bankman-Fried’s relationship with Ellison never spilled into their work at Alameda Research, but both parties stayed professional.
  • Ellison has been named as one of the former FTX executives who will testify in court against Bankman-Fried.

A former Alameda Research engineer revealed that internal warning signs were not how employees at the company learned that the trading firm was about to collapse but rather an admission from former CEO Caroline Ellison.

Aditya Baradwaj explained that “it pretty much seemed like business as usual, right up until the end. The days before the company collapsed, it just seemed like a few really busy days of trading.”

Baradwaj added that employees “had no idea that anything was going on until the very last day, and that’s when Caroline pulled us aside and told us what had been going on behind closed doors.”

Baradwaj further noted that Alameda Research had poor security procedures and checks and balances. While speaking with Coindesk, the former Alameda Research employee claimed that “Alameda’s poor security and risk checks stood out, especially when you consider that traditional firms would’ve had these measures in place.”

“The environment at both Alameda and FTX was one where huge monetary decisions were made with minimal oversight. While there were many issues, we never expected outright illegal activities,” Baradwaj said in the interview.

Interestingly, author Michael Lewis shared similar stories in his book “Going Infinite: The Rise and Fall of a New Tycoon,” which focuses on the rise and fall of FTX founder Sam Bankman-Fried. Lewis wrote that “FTX had switched off Alameda’s risk limits to make itself more appealing.”

Bankman-Fried and some of his close friends, such as Ellison and Sam Trabucco, founded the Alameda cryptocurrency trading fund. Although Bankman-Fried attempted to separate Alameda from FTX, both companies were intertwined. Several reports discovered that Alameda’s balance sheet included a sizable portion of FTX’s FTT exchange token.

Prosecutors believe FTX founder Bankman-Fried played a role in FTX’s collapse and have charged him with multiple financial crimes. Bankman-Fried’s trial began on Tuesday, October 3, and both sides gave their opening statements on Wednesday.

Bankman-Fried’s attorney argued that the 31-year-old did not steal customers’ funds but instead “acted in good faith and took reasonable business measures.” Bankman-Fried faces decades behind bars if convicted of any wrongdoing.

Lawrence Woriji
Lawrence Woriji Verified Author

I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.

Latest News