Has Crypto Whale Alameda researched a financial problem?

Important fast food

  • Alameda Research, the quantitative trading company founded by Sam Bankman-Fried, is said to have $14.6 billion in assets and $7.4 billion in liabilities last June.
  • However, a closer look at the numbers indicates that most of the company’s assets consist of illiquid Solana-based tokens.
  • Alameda’s financial situation may be one of the reasons why Bankman-Fried stopped contagion across the cryptocurrency market over the summer.

According to a new report, Alameda Research’s balance sheet consisted largely of illiquid FTT and SOL tokens last summer. This development casts doubt on the company’s ability to pay its outstanding debts if necessary.

Run the numbers on the Alameda Balance Sheet

Alameda Research has also been affected by the cryptocurrency market, according to new reports looking into the company’s finances.

wed CoinDesk A report citing an unnamed source claimed That quantitative trading firm had more than $14.6 billion in assets as of June 30, versus $7.4 billion in liabilities. Alameda was founded by crypto billionaire Sam Bankman-Fried in 2017, two years before he launched the hugely successful cryptocurrency exchange, FTX.

Alameda is known as one of the biggest crypto whales, but take a closer look at the numbers included in it CoinDesk suggest article That the company may be in a more precarious position than onlookers expected.

This included the $14.6 billion the company had as of June 30, according to the report $3.66 billion in unlocked FTT, $2.16 billion in FTT collateral, $2 billion in equity, $3.37 billion in “crypto holdings” and $134 million in cash. This equates to $11.32 billion, of which $3.28 billion is missing.

Meanwhile, Alameda’s total debt is $7.4 billion, including $292 million in FTT and $863 million in closed SOL. interesting, CoinDesk It claims that Alameda has valued these two debts at 50% below the fair market value because the tokens are locked in. Treating it at fair market value would add more than $1.1 billion to Alameda’s debt.

This means that Alameda currently has more than $6.11 billion in FTT on its books, of which $5.82 billion is accounted for as assets. FTT is a coin launched by FTX in which traders can participate to unlock discounts (from 3% to 60%) on trading fees. FTT is one of the largest currencies in the crypto ecosystem, but according to FTX Official WebsiteThere are currently 197,091,309 FTTs in circulation, which means that The coin has a market capitalization of $4.87 billion. This means that the current FTT market is completely illiquid as far as Alameda is concerned. He holds a $5.82 billion token that he cannot sell without diluting his value.

There are also other concerns about the company’s balance sheet. According to the report, Alameda counted Solana-based tokens such as SOL, SRM, FIDA, MAPS and OXY among its $3.37 billion in crypto assets. Since these were the tokens mentioned by name on the balance sheet, it would be reasonable to assume that they make up Alameda’s largest holding. Although the exact amount of each token held by the company is unknown, most of them have performed poorly throughout the bear market. SRM, FIDA, MAPS and OXY are all down over 93% from their peak as markets are set to become highly illiquid. If these tokens represent Alameda’s pooled crypto holdings, the company will struggle to monetize its $3.37 billion in crypto assets if it wants to.

Take the coding brief

There are some caveats to this analysis. Or not, cipher feed No access was granted to Alameda’s balance sheet – these numbers are based on CoinDesk reports. Second, even if those numbers were accurate as of the end of June, Alameda had four months to make changes to its holdings. Finally, Alameda’s financial reports may contain unknown information that better sheds light on the company’s situation.

However, given these numbers at face value, it appears that Alameda is in dire straits. The company has $7.4 billion in debt, but it seems clear from the numbers that it doesn’t have enough assets to pay it off.

Of course, the situation is likely to be more complicated. While Bankman-Fried stepped down as CEO of Alameda some time ago, The company has a close relationship with FTX. Given FTX’s history of offering bailouts this year, it’s not hard to imagine the exchange stepping in to help Alameda if needed.

But the company’s apparent financial difficulties shed new light on Bankman-Fried’s cavalier stance over the summer. Throughout May and June, brutal market conditions erased Crypto hedge fund Three Arrows Capital, which happens to owe billions of dollars to several major crypto lenders, including Voyager And the BlockFi. Bankman-Fried quickly offered to bail out troubled companies, citing the need to reassert investor confidence in the markets. Through his actions, Bankman-Fried has earned a reputation as a crypto lender of last resort: even he is announce In July, it had more than $2 billion ready to be distributed to prevent further infection.

However, this reported balance sheet may tell a different story. If Alameda got stuck in illiquid coins when the market was down, there is a possibility that Bankman-Fried decided to step up not for the sake of the crypto market, but simply to save Alameda. In this scenario, stabilizing the market, reducing panic and showing strength could be a strategy to satisfy Alameda’s creditors — and prevent them from asking the company to repay its loans.

Disclaimer: At the time of writing, the author of this piece owns BTC, ETH, and many other crypto assets.

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