Alameda Research has been exposed to excessive leverage compared to other FTX clients, according to a Financial Times interview with Sam Bankman-Fried.
Alameda Gains High Leverage Access on FTX When Sam Bankman-Fried Launched a crypto trading site according to him.sayIn an interview with the Financial Times published Saturday. But it did not specify how large the borrowing limits were compared to other clients.
The origins of the large leverage came from Alameda’s role as the primary liquidity provider in FTX at its inception. before other financial groups show interest.
“If you go back to 2019 when FTX started, at that point Alameda was at 45 percent of platform volume,” Bankman-Fried said. said in an interview “Basically, this is a situation where if Alameda’s account loses the ability to take new positions, it leads to a risky problem for the platform. Because we don’t have enough liquidity providers.”
He noted that by 2022, Alameda will account for just 2% of trading volume on FTX, while Alameda’s debt to FTX was about $10 billion at the time of its bankruptcy filing.
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