Sam Bankman-Fried considered shutting down Alameda Research in 2022 due to concerns about the relationship between his two companies, Alameda Research (a trading firm) and FTX (a crypto exchange). He felt that rumors spread by FTX competitors were causing too much trouble for Alameda.
Sam wanted to transform Alameda into an investment and infrastructure development firm, but he insisted that it wouldn’t actively engage in trading. He expressed frustration with the “FUD” (Fear, Uncertainty, and Doubt) surrounding Alameda’s connection to FTX, blaming it on competitors trying to deflect attention from their own issues.
In the posts, Sam clarified that Alameda wouldn’t participate in any questionable trading activities on FTX or anywhere else. The decision came after allegations that Alameda traded against FTX clients and had unfair advantages.
The situation worsened when it was revealed that FTX’s tokens (FTT) made up the majority of Alameda’s balance sheet, leading to inflated investment valuations and effectively turning borrowed money into bad loans. This revelation, reported by CoinDesk, contributed to the challenges faced by Alameda Research.