Cryptopolytech (CPT) Public Press Pass (PPP)
News of the Day COVERAGE
200000048 – World Newser
•| #World |•| #Online |•| #Media |•| #Outlet |
View more Headlines & Breaking News here, as covered by cryptopolytech.com
Alameda Covered a $1 Billion Loss for FTX in 2021 (Report) appeared on cryptopotato.com by CryptoPotato.
FTX’s sister trading desk, Alameda Research, bailed out the exchange before it suffered a possible $1 billion trade loss in early 2021.
This news comes amid claims from former FTX CEO Sam Bankman-Fried that FTX and Alameda were independently operated firms.
- As reported by the Financial Times on Friday, people familiar with the matter said FTX suffered massive losses after a client’s leveraged trade on an obscure crypto token went south. Meanwhile, the “buffers” designed to shield the exchange from losses on a bad trade failed to protect FTX.
- A common risk-management procedure used by firms when lending money is to collect collateral from the borrower in advance. If the borrower’s collateral value falls to a certain level, the lender clears the loan and sells the customers’ assets on its own behalf to cover its costs.
- The token in question, called MobileCoin, spiked from $6 to $70 in April 2021, only to crash just as fast shortly afterward. At the time, a trader borrowed against the coin with an unusually large position, which Alameda had to step in and help cover. The trading desk lost hundreds of millions of dollars in the process.
- Additional blockchain evidence provided by Nansen also suggests that Alameda acted as FTX’s lender of last resort when funds were short.
- The event signals deep ties between Alameda and FTX, both companies founded by Sam Bankman Fried, despite the ex-CEO’s claims that he had no knowledge of what was going on at Alameda.
- Sam Bankman-Fried explained during an interview last month that Alameda itself had a leverage position worth billions open with FTX, prior to going bankrupt.
- Though the position had been collateralized by FTT token, the FTT market was too illiquid and dropped too fast for FTX to liquidate the position, and thus stay solvent.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.
FEATURED ‘News of the Day’, as reported by public domain newswires.
View ALL Headlines & Breaking News here.
Source Information (if available)
This article originally appeared on cryptopotato.com by CryptoPotato – sharing via newswires in the public domain, repeatedly. News articles have become eerily similar to manufacturer descriptions.
We will happily entertain any content removal requests, simply reach out to us. In the interim, please perform due diligence and place any content you deem “privileged” behind a subscription and/or paywall.
CPT (CryptoPolyTech) PPP (Public Press Pass) Coverage features stories and headlines you may not otherwise see due to the manipulation of mass media.
First to share? If share image does not populate, please close the share box & re-open or reload page to load the image, Thanks!