53 lines
4.8 KiB
Markdown
53 lines
4.8 KiB
Markdown
---
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category: "AI & Effective Altruism"
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aliases:
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- "Alameda Research LLC"
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- "Alameda"
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tags:
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- Organization
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- Cryptocurrency
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- Fraud
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- SamBankmanFried
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- EffectiveAltruism
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summary: "Sam Bankman-Fried's trading firm, which drew FTX customer deposits through an undisclosed line of credit and put about 500 million dollars into Anthropic, a stake later sold chiefly to a UAE-aligned group."
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start: 2017
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end: 2022-11
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relations:
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- type: founded
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with: "[[Sam Bankman-Fried]]"
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reverse: true
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start: 2017
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fn: 1
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- type: head_of
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with: "[[Caroline Ellison]]"
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reverse: true
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role: "chief executive"
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end: 2022
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fn: 2
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- type: funded
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with: "[[Anthropic]]"
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start: 2022
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role: "about 500 million dollars"
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fn: 6
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created: 2026-09-22
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updated: 2026-09-22
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---
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Alameda Research LLC was a digital-asset trading firm founded by [[Sam Bankman-Fried]] in 2017, two years before he founded the exchange [[FTX]]. According to the [[Commodity Futures Trading Commission]], Bankman-Fried controlled both from at least May 2019 until November 11, 2022, and Alameda "operated as a primary market maker on FTX."[^1]
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### The Line of Credit
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The CFTC's complaint of December 13, 2022, alleged that FTX customer assets "were routinely accepted and held by Alameda and commingled with Alameda's funds," and that Alameda, Bankman-Fried and others used them for "luxury real estate purchases, political contributions, and high-risk, illiquid digital asset industry investments." At Bankman-Fried's direction, FTX employees built into the exchange's code an "allow negative flag" and an "effectively limitless line of credit" that let Alameda withdraw billions of dollars in customer assets, features not disclosed to the public; the commission put customer losses at more than 8 billion dollars.[^1] On December 21, 2022, the [[Securities and Exchange Commission]] charged Alameda's chief executive, [[Caroline Ellison]], and FTX's co-founder and chief technology officer, [[Gary Wang]], alleging that from 2019 to 2022, at Bankman-Fried's direction, Ellison had bought up FTX's exchange token, FTT, to prop up its price because FTT served as collateral for undisclosed loans of customer assets from FTX to Alameda, and that Wang had written the software that allowed the diversion. Both agreed to settle, and both pleaded guilty and testified against Bankman-Fried, who was convicted on seven counts on November 2, 2023, and sentenced on March 28, 2024, to twenty-five years.[^2][^3]
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### Effective Altruism and Anthropic
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Bankman-Fried had founded Alameda after [[William MacAskill]] recruited him to the "earning to give" wing of [[Effective Altruism|effective altruism]]; in 2018 colleagues including Tara Mac Aulay raised concerns with MacAskill about his honesty and management.[^4] In 2022 Bankman-Fried put about 500 million dollars, through Alameda, into the AI company [[Anthropic]].[^5] In March 2024 the FTX bankruptcy estate agreed to sell most of that stake for 884 million dollars. The largest buyer was a group aligned with [[Mubadala]], the sovereign wealth fund of the [[United Arab Emirates]]; Saudi Arabia, CNBC's sources said, had been ruled out on national-security grounds. The second largest was [[Jane Street Capital|Jane Street]], where both Bankman-Fried and Ellison had worked, buying almost 100 million dollars of shares, with its head of quantitative research, Craig Falls, proposing to buy about 20 million dollars personally; HOF Capital, the [[Ford Foundation]] and funds managed by Fidelity also bought.[^6]
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### Footnotes
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[^1]: Commodity Futures Trading Commission. "CFTC Charges Sam Bankman-Fried, FTX Trading and Alameda with Fraud and Material Misrepresentations." Release 8638-22, December 13, 2022. https://www.cftc.gov/PressRoom/PressReleases/8638-22
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[^2]: Securities and Exchange Commission. "SEC Charges Caroline Ellison and Gary Wang with Defrauding Investors in Crypto Asset Trading Platform FTX." Press release 2022-234, December 21, 2022. https://www.sec.gov/news/press-release/2022-234
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[^3]: "Sam Bankman-Fried sentenced to 25 years in federal prison." *CNN,* March 28, 2024. https://www.cnn.com/2024/03/28/business/ftx-sam-bankman-fried-sentencing
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[^4]: "Exclusive: Effective Altruist Leaders Were Warned About Sam Bankman-Fried Years Before FTX Collapsed." *TIME,* March 2023. https://time.com/6262810/sam-bankman-fried-effective-altruism-alameda-ftx/
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[^5]: "Effective Altruism After Sam Bankman-Fried." Seven Pillars Institute, 2023. https://www.sevenpillarsinstitute.org/effective-altruism-after-sam-bankman-fried/
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[^6]: Sigalos, MacKenzie. "FTX estate selling majority stake in AI startup Anthropic for $884 million, with bulk going to UAE." *CNBC,* March 25, 2024, updated March 28, 2024. https://www.cnbc.com/2024/03/25/ftx-estate-sells-majority-stake-in-startup-anthropic-for-884-million.html
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