Alameda Research, a company owned by Sam Bankman-Fried, which is now under investigation for fraudulent activity, had been struggling to stay afloat since 2017. According to reports from Bloomberg and Reuters, Alameda Research was on the brink of collapse even before FTX came into the picture; they were at risk of running out of money by June 2018.
AR had been struggling to meet its obligations since early 2017 when it began working with FTX. At that time, FTX was still known as Future Tense Exchange (FTX).
The company was founded in 2014 by Bankman-Fried and his partner Brett Tirabassi, who left after two years to start BlockFi Capital. The company was initially focused on algorithmic trading but began offering cryptocurrency trading services soon after its founding.
In 2018, Alameda Research reportedly lost $1 million in Q1 alone but managed to turn things around later in the year with what it called “a strategic pivot” into crypto investment banking services.
As part of its deal with FTX, which went live in October, Alameda Research was expected to bring $25 million in revenue each month for six months — or $150 million total. However, according to people familiar with the matter who spoke with Bloomberg, they would only be able to bring in about $10 million per month at most.
Don’t worry, we hate spam too
one weekly digest, just the important stuff.
How about some social? Follow us on Twitter!