Daily Archives: 12. Januar 2023

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CZ’s Targeted Crash Led to Alameda Exchange’s Collapse: SBF Post-Mortem

• Sam Bankman-Fried, the founder of the bankrupt crypto exchange, released a post-mortem on the FTX-Alameda collapse.
• He listed the combination of three important events that led to its demise, the last one being a targeted crash led by Binance CEO Changpeng Zhao.
• He also gave a peak into FTX US balance sheet, stating that this led to „Alameda’s contagion“ spreading to FTX and other entities.

The founder of the bankrupt crypto exchange – Sam Bankman-Fried aka SBF – has released a post-mortem on the FTX-Alameda collapse. According to Bankman-Fried, the events leading up to the collapse of the exchange began in 2021 when Alameda’s balance sheet had a net asset value of nearly $100 billion, with net borrowing and liquidity on hand standing at $8 billion and $7 billion respectively. Unfortunately, through 2022, the stock and crypto market experienced a significant drop in value.

This event was followed by the investment arm’s failure to „sufficiently hedge its market exposure“. Despite this, it was the last event that directly caused the downfall of Alameda. This event was a targeted crash led by Binance’s CEO Changpeng Zhao. After reports of Alameda’s balance sheet predominately consisting of FTT tokens surfaced, CZ announced that it would sell all of its remaining FTT tokens, causing a market frenzy.

In his post-mortem, SBF said, „But the November crash was a targeted attack on assets held by Alameda, not a broad market move. Over the few days in November, Alameda’s assets fell roughly 50%; BTC fell about 15%–only 30% as much as Alameda’s assets–and QQQ didn’t move at all“. This crash led to a domino effect of Alameda’s contagion spreading to FTX and other entities.

In his post-mortem, SBF also said that he would give nearly all his personal assets to FTX International customers. He also gave a peak into FTX US balance sheet, revealing that on the day of the collapse, the exchange had a net asset value of $2.3 billion, with $2.2 billion in net borrowing and only $100 million in liquidity.

It is clear that CZ’s targeted crash of Alameda’s assets was the main cause of the collapse of the exchange. SBF’s post-mortem provides a detailed insight into the events that led to the demise of Alameda, and the role of Binance’s CEO in the crash. Despite the unfortunate outcome, SBF’s decision to give away nearly all his personal assets to FTX International customers shows his commitment to the crypto community.