FTX crypto exchange founder Sam Bankman-Fried allegedly purchased crypto tokens before they were listed on the platform, according to a Wall Street Journal article.
FTX’s exchange company, Alameda Research, purchased nearly 60 ethereum blockchain-based tokens before the company’s own customers could buy and sell them.
The practice is similar to insider trading.
Alameda was founded and owned by Bankman-Fried.
Blockchain data from Argus, an analytics firm, shows that although FTX has said it will list the first tokens on its exchange for investors ranging from retail to institutional Like hedge funds, you can buy them, but that’s not true.
Instead, from March 2021 to March 2022, Alameda owns $60 million in tokens from 18 of those listings, according to data from Argus.
The article said that the blockchain, which is a digital ledger that can be viewed by everyone, shows that Alameda purchased the tokens prior to the listing.
Knowing that an asset like a token or a stock will be listed means that traders can make money by buying them first and selling them later.
It is not possible to determine whether Alameda will sell tokens, based on data from Argus.
Investigate
List one more token Liquidity and attract more investors to them, similar to when shares go public. A listing can increase the price of a token.
“What we’ve seen is they’re basically almost always in the month leading up to them buying into a position they didn’t have before. It’s clear that there’s something in the market telling them they should. buy things they didn’t have before,” said Omar Amjad, co-founder of Argus, according to the article.
In February, Bankman-Fried told the WSJ in an email that Alameda had received equal information to the other. market makers on its foundation. The article states that traders on Alameda do not have more access to market data, trading or customer information.
The default of FTX, which filed for Chapter 11 bankruptcy on November 11, appears to have occurred as its founder Sam Bankman-Fried reportedly moved $10 billion in customer funds from FTX to its crypto trading platform Alameda Research, according to Reuters, citing sources. two sources have “held FTX senior positions until this week.”
FTX faces a shortfall of $1.7 billion, one source told Reuters, while another said there is a $1 billion to $2 billion shortfall. Bankman-Fried, who stepped down as CEO, was once hailed as the industry’s savior in the era. Liquidity crisis of last summer. His company was valued at $32 billion in February.
Regulators in the United States and the Bahamas, where FTX is headquartered, have opened investigations into the company’s failure.
