This article has been translated from English to Gen Z Slang.
Alameda Research was basically the hype house of crypto hedge funds, started by FTX exchange's main dude Sam Bankman-Fried (aka SBF) and Tara Mac Aulay back in 2017. 😎
Our boy Bankman-Fried flexed some slick trading moves to get Alameda poppin', like arbitrage trading, making markets lit, trading on that volatility, and diving into yield farming. 🚀
SBF dipped from Jane Street Capital back in 2017, where he was trading at their ETF desk, to cook up Alameda. 🤑
Dude made waves in 2018 when word got out that Alameda bagged around $20 million by finessing the price gaps of bitcoin between U.S. and Japanese crypto exchanges. 💰
Keeping it real simple, arbitrage trading means coppin' a digital asset at a bargain on one crypto exchange and flipping it for more cash on another. Rinse, repeat, profit—easy peasy as long as there's enough 💸 between the two prices. 🔥
Japan was all about hiking up those bitcoin prices back in the day, compared to what they were vibing at in the U.S. 🇯🇵
Alameda was reportedly trading a spicy $25 mil a day working that angle. 🤑
On November 2, 2022, Coindesk spilt some tea on Alameda's $14 bil balance sheet. They claimed most of the assets were in FTT, which is the native crypto baby of FTX, also started by SBF. 👀
Sam and FTX dropped FTT as a dope rewards system for its traders. Holding FTT meant discounts and other sweet perks on trades. 🎉
FTX had the reins on everything FTT, and as it got trendier, its value skyrocketed along with FTX and Alameda, since they were holding a fat chunk of it. 📈
When the gossip mill revealed that Alameda and FTX were tighter than everyone thought, FTX users started pulling their cash out fast, with $5 billion yanked out in just 3 days. 💨
The tea spilled later suggesting that SBF and the crew shuffled about $10 billion in customer funds from FTX to Alameda, lowkey against FTX's terms-of-service, trying to save Alameda from a major L with its loan game. 💀
FTX had to pause customer withdrawals since they were getting flooded and didn’t have the funds. Alameda, on its part, saw its balance drop hard and couldn’t cover its mess from risky trades or the 150+ other ventures it was into. 😬
Alameda crashed and burned, filing for Chapter 11 bankruptcy on November 17, 2020. They owe over $5 billion to businesses and investors. Yikes. 😩
The Alameda site was yeeted offline on November 9th, 2022. Two days later, Bankman-Fried was all like, "That's a wrap, folks," on the whole company. 🚫