Partial losses questioned for misappropriating FTX funds? Alameda founder responds: just personal hedging

Bitfinex shareholder and prominent figure in the Chinese cryptocurrency community, Zhao Dong, questioned on Twitter whether Alameda founder Sam Bankman-Fried, who topped the list of unrealized losses on Bitfinex, had used funds from FTX users, the exchange he owns. Sam Bankman-Fried responded that he only used personal funds and various evidence shows that Alameda did engage in arbitrage trading, resulting in significant profits.

Suspicions of Losses, Starting with One-sided Evidence

At 8 a.m. this morning, Bitfinex shareholder Zhao Dong used data from Bitfinex's unrealized profit and loss list since February 24 to question whether Sam Bankman-Fried, CEO of FTX, had over $10 million in unrealized losses and if he used the exchange's user funds.

Despite the low discussion, Sam Bankman-Fried responded to Zhao Dong, stating that this was only personal funds and a hedge operation, bearish elsewhere. The choice of Bitfinex was only because the funding rate for long positions was more favorable.

According to an interview by Chain News, Michael Wu, CEO of the well-known institution Amber Group, ranked second in unrealized losses on Bitfinex, stated that looking at the losses of a single trading platform is not reflective of reality. He said, "As a professional trading service platform, positions are all hedged, with no net positions. Losing a lot of money on one exchange most likely means making a lot of money on another exchange (usually more because of net profit). Therefore, looking at the profit and loss of a single account can only reflect the scale of the hedge position, not the true profit and loss. Although FTX is an exchange, FTX CEO Sam is also the boss of his market maker Alameda, so this position may represent the combined hedging positions of FTX and Alameda. Of course, we do not know whether the funds are separated and their respective proportions."

Just looking at Alameda's profits on the BitMEX leaderboard, there are at least 5,244 bitcoins in profits, far exceeding the amount lost in long positions on Bitfinex.

Currently, Sam Bankman-Fried has removed his name from the Bitfinex leaderboard, showing that Amber Group is now in the top position for unrealized losses.

FTX Exchange Recently Issued Equity Tokens

Earlier this week, derivatives exchange FTX released equity tokens with a minimum investment amount of $250,000 and profit-sharing functions, valuing the tokens at $1 billion. Under the system of completed platform token fundraising and a commitment to repurchase and destroy based on profits, some are surprised by this financing move, questioning why FTX chose to raise funds at this time when its profit situation seems very good.

Alameda's profits from hedging operations still appear to be quite high. Although it cannot be confirmed whether the operating funds are from FTX user funds, it can be inferred that Sam Bankman-Fried's financial situation remains very sound.

Further Reading

• Is this an STO? Derivatives Exchange Seeks Shareholders, FTX Offers Minimum $250,000 Equity Stake
• [Special Feature] Maximizing Profits in Contract Trading! A Comparison of Five Exchanges for Beginners

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