Alameda Research

Alameda Research was a defunct cryptocurrency trading firm and liquidity provider co-founded in September 2017 by Sam Bankman-Fried, Gary Wang, and Tara Mac Aulay. It became central to findings in criminal and regulatory proceedings that FTX customer funds were misused to cover Alameda’s trading losses and other liabilities, based on sworn testimony and court determinations in those cases.^[23] On November 11, 2022, Alameda Research, alongside its sister company FTX and affiliated entities, filed for Chapter 11 bankruptcy in the United States following a solvency crisis.^[4][1][2]

History

Alameda Research was a Hong Kong-based private equity firm co-founded by Sam Bankman-Fried in September 2017. It was a sister company of FTX, the cryptocurrency exchange that collapsed in November 2022. Alameda Research was a quantitative cryptocurrency trading firm that provided liquidity in cryptocurrency and digital assets markets.^[3] Much of what later became public about Alameda’s balance sheet, its borrowing from FTX, and related governance failures has come from sworn testimony and factual findings in subsequent criminal, civil, and bankruptcy proceedings involving FTX and Alameda.^[23]

On August 24, 2022, Sam Trabucco, the co-CEO of Alameda Research stepped down from his leadership role to become an adviser of the firm. Trabucco said in a tweet thread that he had significantly reduced his role at Alameda over the past few months, noting he reached a point in life where had to “prioritize other things” such as his personal life. “I needed to relax,” he tweeted.^[15][16]

Alameda's DeFi Investment

Alameda was a major DeFi investor. According to its Crunchbase^[20] profile, the company made 286 investments in companies like Aptos, Optim Finance, Cardinal, etc. in the five years of its existence.^[21]

The investments also included several capital injections for firms working on DeFi solutions. On 8 November 2022, fintech and software company Fordefi announced it had raised $18m for the launch of an institutional DeFi wallet from Alameda and other investors.^[21]

Alameda Research's Bankruptcy

In November 2022, Bankman-Fried announced that Alameda Research and FTX had filed for Chapter 11 bankruptcy along with other companies related to FTX. Websites for Alameda Research and the company’s venture capital arm, FTX Ventures, were offline and made private.^[6]

The founder Sam Bankman-Fried resigned from his position as CEO and was replaced by John J. Ray III. On November 17, Ray stated in a sworn declaration submitted in bankruptcy court that according to the firm's records, Alameda Research had lent $1 billion to Bankman-Fried.^[5][11] Subsequent criminal proceedings and appellate findings described Alameda as having “special privileges” on the FTX exchange, including the ability to maintain substantial negative balances and draw on a line of credit that was increased over time to as much as $65 billion, funded by FTX customer deposits.^[23] These proceedings found that Alameda incurred multi-billion‑dollar trading losses and financed illiquid investments using customer assets taken from FTX without customers’ knowledge, contributing to a large shortfall that left the group insolvent.^[23]

Anonymous sources cited by the Wall Street Journal on November 10, 2022, said that Alameda Research owed FTX some $10 billion, as FTX had lent funds placed on the exchange for trading to Alameda so that Alameda could make investments with the money. Since FTX had $16 billion in customer assets, the exchange lent over half of its customer funds.^[7]

Trading platforms are required by their regulators to hold enough money to match what customers deposit and Alameda Research had underestimated the amount FTX needed to keep on hand in order for customers to cash out. Aside from FTX, Alameda had to take out additional loans from other financial firms too, which totaled $1.5 billion, the report said, citing people familiar with the matter.^[7]

On November 12, 2022, anonymous sources cited by the Wall Street Journal said Alameda CEO Caroline Ellison^[17] disclosed to other Alameda employees that she, Sam Bankman-Fried, Gary Wang, and Nishad Singh knew that client deposits were transferred from FTX to Alameda. Ellison also said the funds were partly used to pay back loans Alameda had taken to make investments.^[9]

Alameda Research held part of the supply of tokens of FTX, called FTT. The token collapsed after Binance's CEO Changpeng Zhao made an announcement^[22] that it was selling its $580 million worth of the token due to concerns about its stability and other revelations that had come to light. Other token holders also started selling it, and the token collapsed as a result. The collapse of Alameda came after a leaked balance sheet revealed that the company’s books relied heavily on the FTX token (FTT) issued by FTX.^[8][10]

Under the global Chapter 11 plan confirmed for FTX and its affiliated debtors, including Alameda, customer and lender recoveries are being administered through a consolidated distribution scheme that treats exchange assets as property of the bankruptcy estate.^[24] The plan projections filed with the bankruptcy court state that the vast majority of FTX customers are expected to receive the allowed value of their deposits as of the petition date, and many are projected to receive additional interest to reflect the time value of their locked funds.^[24] In August 2024, the U.S. Commodity Futures Trading Commission obtained a consent order against FTX Trading and Alameda Research imposing approximately $4 billion in joint restitution and disgorgement obligations, which are to be satisfied through the same bankruptcy process rather than through separate collections.^[25]

Investigations & Arrests

Following the firm's collapse, the Royal Bahamas Police Force launched a criminal investigation into the company. On 15 November 2022, a class-action lawsuit was filed in Miami against CEO, Bankman-Fried.^[12]

On 13, December 2022, Founder Bankman-Fried was arrested in his apartment in the Bahamas by the Royal Bahamas Police Force. The arrest was made in response to charges brought against him by the Southern District of New York, including "wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering." Following a court hearing on Dec. 22, 2022, a federal judge decided to release Bankman-Fried from custody after his attorneys and federal prosecutors agreed to a $250 million bond.^[12]

On 21, December 2022, both Caroline Ellison (former CEO of Alameda) and Gary Wang (former Chief Technology Officer of FTX) pled guilty to fraud and other charges and agreed to cooperate with federal investigators in the criminal case against Bankman-Fried. Former Alameda Research director, Nishad Singh, pled guilty to six different charges, including three counts of conspiracy to commit fraud.^[13][14]

In a subsequent jury trial in the Southern District of New York, Bankman-Fried was convicted on seven criminal counts related to fraud and conspiracy arising from the misuse of FTX customer funds and misleading lenders and investors. He was sentenced to 25 years in prison and ordered to forfeit approximately $11.02 billion in assets, with the U.S. Court of Appeals for the Second Circuit affirming his conviction, sentence, and forfeiture judgment in June 2026.^[23] In parallel civil enforcement actions, former Alameda CEO Caroline Ellison and FTX executives Gary Wang and Nishad Singh agreed to final consent judgments with the U.S. Securities and Exchange Commission that permanently enjoin them from future violations of federal securities antifraud provisions and impose multi‑year officer‑and‑director bars from serving at public companies.^[26]

Donations

During the 2020 United States presidential election, Alameda contributed $5 million to Future Forward USA, a liberal political action committee (PAC) supporting President Joe Biden. In 2022, Alameda reportedly donated $5 million to Guarding Against Pandemics, a PAC established by Sam Bankman-Fried's brother, Gabe.^[18]​

Additionally, the company provided financial assistance to the Worldwide Online Olympiad Training program through the Art of Problem Solving.^[19]​

Legal Aftermath and Legacy

Much of what is publicly known about Alameda’s balance sheet, its use of FTX customer funds, and its internal controls derives from sworn testimony, judicial findings, and regulatory pleadings in the intertwined criminal, civil, and bankruptcy proceedings involving FTX and Alameda.^[23] Through the jointly administered Chapter 11 cases of FTX Trading, Alameda Research, and affiliated entities, a global settlement and confirmed plan provide for consolidated distributions that treat exchange assets as property of the estates; plan projections filed with the bankruptcy court state that exchange customers and many other creditors are expected to recover the allowed value of their claims as of the petition date and, in many instances, additional interest for the time their assets were locked.^[24] Regulatory resolutions include a Commodity Futures Trading Commission consent order imposing approximately $4 billion in joint restitution and disgorgement obligations on FTX Trading and Alameda, to be satisfied through the Chapter 11 plan, and Securities and Exchange Commission consent judgments permanently enjoining former executives Caroline Ellison, Gary Wang, and Nishad Singh from future securities‑law violations and imposing multi‑year officer‑and‑director bars.^[25]​^[26] In the parallel criminal case, Sam Bankman‑Fried’s conviction on fraud and conspiracy charges, 25‑year prison sentence, and approximately $11.02 billion forfeiture order were affirmed by the U.S. Court of Appeals for the Second Circuit, which described Alameda as having special privileges on FTX that enabled the diversion of customer funds.^[23]​

2023–2024: Bankruptcy Plan and Civil Enforcement

Following the November 2022 petition date, the Chapter 11 cases of FTX Trading, Alameda Research, and affiliated entities proceeded on a jointly administered basis, culminating in a global settlement and confirmed Chapter 11 plan that address competing claims to exchange assets and related litigation.^[24] The plan treats assets held on FTX.com and FTX.US as property of the bankruptcy estates and provides for distributions to exchange customers and other creditors based on the allowed value of their claims as of the petition date, with plan projections indicating that most customers and many other creditors are expected to receive that value and, in many cases, additional interest for the time their assets remained locked.^[24] The confirmed plan and related settlements resolve disputes over whether customer deposits and other assets on the exchanges were held in trust or were estate property, and how to allocate recoveries among different creditor groups, with claims related to Alameda’s own borrowing from third‑party lenders addressed through the same distribution waterfall as other unsecured claims.^[24]

In August 2024, the Commodity Futures Trading Commission obtained a final consent order against FTX Trading and Alameda Research that permanently enjoined them from further violations of the Commodity Exchange Act and CFTC regulations and imposed approximately $4 billion in joint and several restitution and disgorgement obligations.^[25] The order provides that this monetary relief will be satisfied through distributions made under the confirmed Chapter 11 plan, rather than through separate collection efforts by the CFTC, aligning the agency’s civil remedies with the bankruptcy distribution scheme.^[25]

2024–2025: SEC and CFTC Actions Against Executives

In parallel with the bankruptcy and CFTC proceedings against the corporate entities, the Securities and Exchange Commission pursued civil enforcement actions against former Alameda and FTX executives. In 2024, the SEC obtained final consent judgments against former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, permanently enjoining them from future violations of the antifraud provisions of the federal securities laws and related rules.^[26] The judgments also imposed multi‑year officer‑and‑director bars from serving at public companies, including a 10‑year bar for Ellison and 8‑year bars for Wang and Singh.^[26]

These civil resolutions paralleled the executives’ earlier criminal guilty pleas and cooperation agreements in the federal prosecution of Sam Bankman‑Fried, and the SEC’s findings incorporated allegations that Alameda received special trading privileges on FTX, including the ability to maintain substantial negative balances and access an effectively uncapped line of credit financed by customer assets.^[23] Together with the CFTC’s consent order, the SEC judgments contributed to a regulatory record that characterized Alameda as operating with preferential access to customer funds and risk controls within the FTX exchange structure.^[25]​^[26]

2025–2026: Criminal Appeal and Final Judgments

Following his 2023 jury trial in the Southern District of New York, Sam Bankman‑Fried was convicted on seven counts of fraud and conspiracy arising from the misuse of FTX customer assets and misrepresentations to lenders and investors, sentenced to 25 years in prison, and ordered to forfeit approximately $11.02 billion.^[23] In June 2026, the U.S. Court of Appeals for the Second Circuit affirmed the conviction, sentence, and forfeiture judgment in United States v. Bankman‑Fried, rejecting challenges to the sufficiency of the evidence and various evidentiary and procedural rulings.^[23]

The appellate opinion recounted evidence that Alameda had an extraordinary line of credit on the FTX exchange, was exempt from standard risk controls that applied to other customers, and was permitted to run large negative balances funded by FTX customer deposits.^[23] It further described how FTX customer funds were diverted to Alameda for proprietary trading, venture investments, and loans to insiders, contributing to multibillion‑dollar losses when Alameda’s positions declined in value.^[23] Taken together with the factual findings in the bankruptcy court and the CFTC and SEC orders, these criminal judgments have led courts and regulators to describe Alameda as a central vehicle through which FTX customer assets were misappropriated and losses were concentrated within the wider FTX group.^[24]​^[25]​^[26]​^[23]