The close ties between FTX and its affiliated trading firm, Alameda Research, have been unearthed, demonstrating a classic case of insider trading. The trading firm bought tokens that were scheduled to be listed on FTX ahead of public announcements and then sold them for a profit.
According to WSJ, CEO Owen Rapaport of compliance software firm Argus. Alameda Research stockpiled tokens in the 12 months following March 2021 before they were listed by sister company FTX, potentially gaining an advantageous market position.
Per the public Ethereum blockchain records obtained by Argus, Alameda had approximately $60 million invested in 18 listings of FTX coins linked to the Ethereum blockchain.
“What we see is they’ve basically almost always in the month leading up to it bought into a position that they previously didn’t. It’s quite clear there’s something in the market telling them they should be buying things they previously hadn’t,” said Omar Amjad, co-founder of Argus.
In 2017, Sam Bankman-Fried founded Alameda Research, a quantitative trading firm. In 2019, he founded FTX, the now-defunct cryptocurrency exchange. He maintained that the two companies were separate entities, but in reality, FTT accounted for a sizable portion of Alameda’s balance sheet.
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