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US House Committee To Investigate And Hold Bipartisan Hearing On FTX Collapse

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US House Committee To Investigate And Hold Bipartisan Hearing On FTX Collapse

The U.S. House Financial Services Committee is planning to investigate the FTX collapse, according to a joint press release published by the committee’s chair Maxine Waters and representative Patrick McHenry. Furthermore, a congressional hearing is scheduled to take place in December, according to the joint statement.

Bipartisan Congressional Hearing to Be Held in December Over the FTX Fallout

On Wednesday, Nov. 16, 2022, congresswoman Maxine Waters (D-CA) and representative Patrick McHenry (R-N.C.), published a joint statement that says a bipartisan hearing has been announced that will investigate the “collapse of FTX and the broader consequences for the digital asset ecosystem.”

The U.S. House Financial Services Committee “expects to hear from the companies and individuals involved, including Sam Bankman-Fried, Alameda Research, Binance, FTX, and related entities, among others,” the joint statement from Waters and McHenry details.

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“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds,” congresswoman Waters said in a statement. The California-based Democrat added:

Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year. That’s why it is with great urgency that I, along with my colleague Ranking Member McHenry, announce the Committee’s intention to hold a hearing to investigate the collapse of FTX.

Waters also led the charge in investigating and reporting on the meme stock and Gamestop market event last year. In regard to the FTX collapse, the Republican representative McHenry stressed that the House Financial Services Committee plans to get to the bottom of the FTX fiasco.

“Oversight is one of Congress’ most critical functions and we must get to the bottom of this for FTX’s customers and the American people,” McHenry said. “It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system,” McHenry added.

FTX filed for bankruptcy protection on Nov. 11, 2022, after it was once a firm that had a $32 billion valuation. Furthermore, after the filing was registered, the same day nearly $500 million in crypto tokens were suspected to be stolen from FTX wallets.

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Alameda Research, bankruptcy protection, Binance, Bipartisan Hearing, Chairwoman Waters, Congresswoman, ftx, FTX Bankruptcy, FTX collapse, FTX wallets, Maxine Waters, Sam Bankman-Fried, US House Committee, US House Financial Services Committee

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What do you think about the House Financial Services Committee investigating the collapse of the now-bankrupt FTX? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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500 illiquid investments

Drones, Fertility, And Defi — A Look At Alameda Research’s Massive $5.4 Billion Portfolio Of Investments

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Drones, Fertility, And Defi — A Look At Alameda Research’s Massive $5.4 Billion Portfolio Of Investments

Over the last few weeks, there’s been a lot of information revealed surrounding the recent FTX and Alameda Research disaster. On Dec. 6, the Financial Times (FT) published documentation that shows Alameda’s investment portfolio, which alleges the company spent more than $5 billion on hundreds of investments. Some of the funds went to odd investments like a fertility company called Ivy Natal and a drone manufacturer called Brinc Drones.

Alameda Invested in Close to 500 Firms and Projects

During the last two years, FTX and Alameda Research spent billions on deals, sponsorships, and investments. At the end of January 2022, FTX looked colossal after it raised $400 million from investors like Softbank Vision Fund 2, Tiger Global, Temasek, Paradigm, and the Ontario Teachers’ Pension Plan Board.

After the Series C raise, FTX was valued at $32 billion and the former FTX CEO Sam Bankman-Fried (SBF) said FTX aimed to expand the firm’s “global reach.” After the revelations concerning Alameda’s balance sheet during the first week of November, FTX and SBF’s quantitative trading firm imploded.

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Since then, FTX’s parent firm West Realm Shires Services, Alameda Research, and approximately 130 additional affiliated companies filed for Chapter 11 bankruptcy protection. This week on Dec. 6, 2022, FT released documentation tied to Alameda Research’s investments, which were close to 500 investments that added up to roughly $5.4 billion.

Genesis Digital Assets and Anthropic received the most funding from Alameda Research.

In addition to FT, The Block’s VP of research, Larry Cermak, exported the entire list of Alameda-based investments into an excel sheet. Cermak further noted that Alameda’s largest investments include Genesis Digital Assets, Anthropic, Digital Assets DA AG, K5, and IEX.

If the data is accurate, the documentation shows that Alameda invested a lot of money into blockchain projects and foundations, tokens, and non-fungible token (NFT) projects as well. This includes Hole Tokens, Polygon, Near, 1inch, Lido, Xterio, Aptos, and Yuga Labs. Polygon for instance received $50,000,000 from Maclaurin Investments Ltd., otherwise known as Alameda Ventures.

Near gathered $50 million from FTX Ventures Ltd., and Maclaurin gave Near $30,000,000. FTX Ventures gave Yuga Labs roughly $50 million and Aptos scored $74.9 million from Clifton Bay Investments, also known as Alameda Research Ventures. Alameda invested in well known funds like the Multicoin Venture Fund II and the Skybridge Capital II fund.

Alameda Research founder and former FTX CEO Sam Bankman-Fried (pictured left) and Alameda Research CEO Caroline Ellison (pictured right).

Money went to Chinese news companies such as Blockbeats, and O’daily News. The company invested in Paxos, Messari, Starkware, Circle, Fanatics, Magic Eden, and Sky Mavis (Axie Infinity). An Ohio-based produce and vertical farming firm called 80 Acres got $25 million and $11.5 million was funneled to a firm called Geniome.

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A whopping $500 million went to the artificial intelligence (AI) research firm Anthropic and $1.5 million went to a fertility venture called Ivy Natal. FT described Alameda’s portfolio as a “disparate bundle of nearly 500 illiquid investments split across 10 holding companies.” The FT author further notes that “FT makes no claim as to the data’s accuracy or completeness” as far as the documentation of Alameda’s investments are concerned.

Tags in this story

500 illiquid investments, Alameda Research, Alameda Research CEO, aptos, Caroline Ellison, Circle, Fanatics, ftx, FTX companies, Geniome, Holding Companies, Lead up, Magic Eden, messari, Multicoin Venture, NEAR, O’daily News, Paxos, Polygon, Sam Bankman-Fried, sbf, Skybridge Capital, starkware, Yuga Labs

What do you think about all the alleged investments Alameda made? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Alameda Research

FTX saga continues as this Committee Chair insists on getting SBF’s testimony

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FTX saga continues as this Committee Chair insists on getting SBF’s testimony

  • Committee Chair Maxine Waters stated that she expects SBF to testify before the House committee
  • Australian Regulatory body accused FTX Australia of exploiting loopholes to get licensed

As more corporations publicly state their exposure to FTX, the bankrupt exchange’s story continues snowballing. Sam Bankman-Fried, the man at the center of it all, has given multiple interviews in an effort to justify his part in it all.

However, the most recent exchange SBF had with a House Committee member increased the likelihood of an outcome against SBF. The chances that the company would be subject to greater examination alongside SBF have increased significantly.

Will SBF testify?

The House Financial Services Committee Chair Maxine Waters publicly criticized former FTX CEO Sam Bankman-Fried. SBF stated that he wished to testify only after “learning and examining what transpired at the exchange.”

Furthermore, on 6 December, Waters tweeted that Bankman-Fried had adequate information for the testimony. This could be stated on the basis of his many media interviews following the firm’s bankruptcy. 

[email protected]_FTX,

Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony. (1/3) https://t.co/YUVVjOkC40

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— Maxine Waters (@RepMaxineWaters) December 5, 2022

On 13 December, Waters will preside over a hearing to investigate the fall of FTX. The committee has explicitly stated that it expects Bankman-Fried and others involved in the events surrounding the collapse of the exchange to testify.

Whether SBF responds to the summons remains to be seen, but it is becoming clear that the US legal system will investigate the incident.

FTX Exploit ASIC’s Loopholes

On 5 December, the head of Australia’s securities and investments watchdog, Joseph Longo, said that the defunct exchange was able to get a license in Australia by exploiting legal gaps. The statement was given before a joint parliament committee looking into companies and financial services.

When asked how and why ASIC allowed FTX to obtain an AFSL under its watch, Longo defended the regulator. He stated that a regulatory flaw precluded ASIC from acting and undertaking the appropriate checks. 

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Due to its December 2021 acquisition of IFS Markets, FTX purportedly avoided the normal procedures for acquiring an AFSL. The chairman also asked for this gap to be closed so that nothing like this can happen again, according to reports from the Australian Financial Review.

More on the FTX plate 

During his most recent interview, SBF provided some extra details about FTX’s crash. When asked about whether FTX had a Chief Financial Officer (CFO), he made an oblique reference to the absence of such a position. However, he added that investors may still have optimism because FTX US was still highly solvent. 

SBF further claimed that most remarks of John Ray – already entered into the court record – were false. He said no one on the current FTX team had contacted him for more information. Further, he did not elaborate on whether investors knew about Alameda‘s access to FTX.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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Alameda Balances

Document Claims Alameda CEO Caroline Ellison’s FTX Margin Position Was Negative $1.3B In May 2022

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Document Claims Alameda CEO Caroline Ellison’s FTX Margin Position Was Negative $1.3B In May 2022

In a number of recent interviews, the former co-founder of FTX, Sam Bankman-Fried (SBF), explained that he “wasn’t running Alameda” and he “didn’t know the size of their position.” In a more recent discussion with The Block’s Frank Chaparro, SBF explained that auditors were looking at FTX’s corporate financials, but the auditors were “not looking at customer positions and not looking at customer risk.” This week, an FTX insider speaking to Bitcoin.com News under terms of anonymity shared a document that purportedly shows Alameda Research CEO Caroline Ellison’s personal account was in the hole by $1.31 billion in May 2022.

SBF Interviews Continue to Highlight a Massive Margin Position That Went Sour

There’s been a lot of information shared by the former FTX co-founder Sam Bankman-Fried (SBF) during his interviews, and it seems that somehow, without his knowledge, a large margin account got out of control. This has been blamed on “poorly-labeled accounting” practices and SBF said he “f***ed up.”

“In multiple ways, frankly. In terms of letting a margin position get too big, bigger than I thought it was. And not being thorough enough to catch that,” SBF told New York Magazine. The massive margin position, that took SBF off guard, has been referred to in many reports about FTX and during SBF interviews.

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“We should not have allowed a margin position to get that big,” SBF stressed to New York Magazine reporter Jen Wieczner. “It was too big. And it was too big, given the liquidity of the collateral,” SBF added. In another statement, SBF detailed that Alameda’s margin position was so big that it “was not going to be closable in a liquid way in order to make good on its obligations.”

“That position, in retrospect, seems like it got substantially bigger in the middle of the year,” SBF added. The FTX co-founder continued:

That made it go from a somewhat risky position to a position that was way too big to be manageable during a liquidity crisis, and that it would be seriously endangering the ability to deliver customer funds.

During SBF’s most recent interview with The Block’s Frank Chaparro, the former FTX CEO said that regulators and auditors did not see any financial holes because customer positions, and Alameda Research’s positions, were not included in FTX’s financials. SBF said auditors looked at certain aspects, but they were “not looking at customer positions and not looking at customer risk.”

“This was effectively a customer negative position, and many customers had negative positions open on FTX,” SBF told Chaparro. “Those were not part of FTX’s assets or liabilities, they were customer assets and liabilities, and so FTX’s financials were not directly impacted by this.” Chaparro’s interview also talks about how top executives were “extended large personal lines of credit.”

FTX Insider Document Supposedly Shows Caroline Ellison’s Margin Position Was a $1.3 Billion Hole

This week a document was sent to Bitcoin.com News that allegedly shows Caroline Ellison’s balance on FTX seven months ago in May 2022. According to the source familiar with the matter, Ellison shared this data among a number of FTX staff members when she was experiencing a technical glitch with her personal trading account.

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A screenshot of the margin position allegedly shared by Caroline Ellison back in May 2022 to a number of FTX staff members. It is claimed that the position belonged to the Alameda Research CEO.

The document shows Ellison ostensibly had a negative balance at that time of around $1.31 billion in May 2022. All FTX accounts show negative balances, if the user has a negative balance for specific reasons such as that a payment wasn’t settled or the user was in debt from margin positions. The documentation that is allegedly tied to Ellison, shows an enormous balance that no ordinary user would have, including a negative quantity of FTX equity.

FTX accounts show a negative balance for a few specific reasons.

The document our newsdesk viewed indicates the user’s negative balance owed or held in a margin position, points to a massive amount of FTT, megaserum (MSRM), locked megaserum (MSRM), locked serum (SRM), locked maps (MAPS), solana (SOL), ethereum (ETH), bitcoin (BTC), and millions of dollars worth of stablecoins. The user’s balance, allegedly tied to Alameda CEO Ellison, shows nearly every account is in the negative to the tune of roughly $1.31 billion.

Chaparro notes around the 9:30 mark in his interview that Ellison mentioned that FTX extended quite a bit of credit to Alameda Research. “[Ellison] said that you knew, that Gary knew,” Chaparro pressed during his question, and he said people within both firms knew about these lines of credit. “I think she’s likely correct, that Alameda Research was effectively extended a substantial amount of credit by FTX and in the end, that margin position became under severe stress and it blew out.”

A negative $1.31 billion margin position, like the one disclosed to our newsdesk this week, is a very large hole. Margin positions refer to trades that are made using borrowed funds and usually, if the trader is unable to maintain the minimum required margin, the position is liquidated in order to repay the borrowed funds. The large margin position shared in May 2022, is around the same time frame the Terra LUNA fiasco happened.

The insider that shared the document purportedly tied to Ellison, asked “how can a buddy of SBF generate a debt” of that size “with no collateral?” There’s a lot of unanswered questions that circle back to Ellison and people have been investigating the Alameda CEO for quite some time. Ellison was reportedly spotted in New York this past weekend with the FTX office dog called ‘Gopher.’

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Alameda Balances, Alameda CEO Caroline Ellison, Alameda Research, Alameda trading, Balances, Caroline Ellison, debt, debt over collateral, Ellison Balances, Frank Chaparro, FTT, ftx, FTX collapse, FTX fiasco, Interviews, Liquidation, Locked Coins, Locked Sums, margin, Margin Position, Negative $1.3 Billion, Negative Balance, New York Magazine, Sam Bankman-Fried, sbf, Serum, SRM

What do you think about the document that supposedly shows Caroline Ellison had a negative $1.3 billion margin position in May 2022? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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