Sam Bankman Fried Cheated: There has been reported that Sam Bankman-Fried, FTX co-founder employed an old tactic to increase his profits on his cryptocurrency exchange FTX. The owner knows how to manipulate things to embrace better earnings from the platform.
It is reported by WSJ. According to the story, it emphasizes that Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, employed old tricks to make gain from the platform. Basically, the owner, Sam-Bankman Fried, purchased cryptocurrency tokens before they were featured on the website.
As per the story, Alameda Research- a FTX’s trading firm also owned by Bankman Fried bought nearly 60 Ethereum-based tokens. It was all done before the company’s own clients could buy and sell them. The method is comparable to insider trading.
Blockchain data from analytics company Argus revealed some unbearable facts about FTX’s actions. It emphasizes that What FTX’s claim was totally incorrect. According to the report, the claim of FTX that it would put the tokens on its exchange first so that investors, both retail and institutional ones like hedge funds, could buy them was untrue. Instead, Alameda acquired $60 million worth of the tokens from 18 listings between March 2021 and March 2022.
Overall, the story claimed that the blockchain, a public digital database, proved that Alameda bought the tokens before the listings.
When traders are aware that an asset, such as a stock or token, is about to be listed, they might profit by purchasing and then quickly disposing of the asset. Based on the information from Argus, it is impossible to establish whether Alameda sold the tokens, if at all.
What Investigation Claims?
You might be aware that when a listing of a company goes public, the price of that particular stock certainly goes up. Similarly to it, listing a token increases its liquidity and attracts more investors to it. Moreover, a listing may raise a token’s price.
It’s fairly obvious that the market is telling them they should be buying things they previously hadn’t. According to Omar Amjad, co-founder of Argus, who said, “What we observe is that they’ve almost virtually always purchased into a position in the month preceding up to it.”
The traders on Alameda did not have more access to either market data or trading or client information, according to the February WSJ piece of article. According to the email of Bankman-Fried, FTX co-founder, it could be quoted as “Alameda received information that was equal to the other market makers on its platform.”
According to Reuters, which cites two sources that “held senior positions at FTX, for why the platform went insolvent. According to them” the bankruptcy of FTX appears to have happened when Sam Bankman-Fried reportedly transferred $10 billion of customer funds from FTX to his cryptocurrency trading platform Alameda Research.
One source informed Reuters that FTX, once the largest crypto exchange is short $1.7 billion, while another claimed that between $1 billion and $2 billion vanished from the platform. Bankman-Fried, who just resigned as CEO, was once heralded as the industry’s rescuer amid the summer’s liquidity crisis. In February, his business was given a $32 billion valuation.
The regulators now have a keen watch on everything revolving around the firm. They have started looking into the firm’s mess in the United States and the Bahamas, where FTX is headquartered.
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