FTX News: Alameda Research Was First to List FTX Tokens

 

Alameda, which was meant to be separate from Sam Bankman-FTX, Fried’s reportedly amassed tokens before their listings on the market were made public, according to crypto compliance consultancy Argus.

 

Argus, a crypto compliance consultancy, conducted an investigation of token purchases made by Alameda Research using insider information about upcoming FTX listings.

 

Alameda has $60 million worth of 18 distinct tokens that were eventually listed on FTX between the beginning of 2021 and March of current year. The Wall Street Journal was the first media outlet to make reference to the study on Monday. Decrypt’s request for comment from the corporation went unanswered for some time.

 

Alameda Research, established in 2017 by Sam Bankman-Fried, is a quantitative trading firm. He left Alameda’s day-to-day operations in 2021 and went on to start the defunct cryptocurrency exchange FTX the following year. Although Bankman-Fried insisted that the two companies were unrelated, a significant percentage of Alameda’s balance sheet was made up of FTT, the FTX exchange token, which led to a bank run and the subsequent bankruptcy filing by FTX last week.

 

Argus, a London-based startup created just last year, has attracted investment from VC heavyweights including Y Combinator and Charles River Ventures.

 

A month before the event, “we see that they’ve almost virtually always bought into a stance that they previously didn’t,” Argus co-founder Omar Amjad told the WSJ. “It’s obvious that the market is influencing people to make purchases they wouldn’t have made otherwise.”

 

Similar trends have emerged at other cryptocurrency companies, such as NFT marketplace OpenSea and public cryptocurrency exchange Coinbase. Legislators aren’t happy about it.

 

The Department of Justice claims that former OpenSea product manager Nate Chastain was the first digital asset dealer ever charged with insider trading. He allegedly utilized insider knowledge regarding which NFT collections were going to be highlighted on the homepage of the marketplace for personal gain last year. The judge rejected his request to dismiss the case after he was arrested and prosecuted in June on the grounds that NFTs “are neither securities nor commodities.”

 

Before a public blog post revealed that they were being considered for listing on Coinbase in April, Crypto Twitter personality and podcast presenter Cobie identified an Ethereum wallet that purchased $400,000 worth of tokens. After two weeks, Coinbase CEO Brian Armstrong wrote on the company blog that the firm would no longer disclose which assets were under consideration for listing.

 

Ishan Wahi, a former product manager at Coinbase, was charged with conspiracy to conduct wire fraud by the Justice Department in July. On the same day, Wahi was charged by the U.S. Securities and Exchange Commission for allegedly disclosing non-public listing notifications to his brother Nikhil and a friend, Sameer Ramani.

 

If the charges against Alameda Research are true, the firm would have engaged in frontrunning exchange listings on a larger scale than either the ex-OpenSea or ex-Coinbase managers who have already been charged.