In a recent report, it has come to light that Sam Bankman-Fried (SBF) allegedly mishandled a substantial amount of cryptocurrency, further underscoring concerns about his management practices. The Wall Street Journal has exposed a series of events that shed light on his reckless decision-making.
$170 Million Borrowed and Lost
During his tenure as the head of investments at Alameda, SBF reportedly borrowed $170 million from individuals for trading purposes, only to incur significant losses. This risky move left investors in a precarious position.
In one instance, 20 million XRP, valued at $4 million, mysteriously disappeared from Alameda Research’s trading account and went unnoticed for weeks. When confronted about it, SBF downplayed the significance of the missing funds.
SBF offered vague explanations regarding the whereabouts of the missing XRP. He suggested that the tokens might have been moved from a US exchange to a South Korean platform used by Alameda. However, he lacked concrete details about the transfer and the platform involved.
To manage the crisis, SBF sought to have staff falsely claim that 80% of the missing funds were accounted for, even though their location remained unknown. This raised severe concerns among employees.
To trace the missing XRP, employees pressured SBF into halting trading activities for two weeks. This pause in operations underscored the gravity of the situation.
After several months of uncertainty, Alameda Research eventually traced the missing XRP to the South Korean exchange, Bithumb. However, it was revealed that Bithumb did not know who had sent the funds until SBF reached out to retrieve the coins.
This incident is just one in a series of revelations about SBF’s management practices. He allegedly used Alameda profits to buy Solana at an extremely low price of $0.20 per coin before its listing. Additionally, he invested FTX user funds into Alameda, raising ethical concerns.
These cascading details provide a troubling glimpse into the management of Alameda and FTX under SBF’s leadership, which ultimately led to substantial losses. It’s worth noting that these revelations coincide with SBF’s recent conviction on all counts in the FTX trial. The crypto community is left questioning the accountability and transparency of prominent figures in the industry.