Insider trading: Onchain data reveals Alameda acquired specific tokens a month before FTX quotes

Sam Bankman-Fried’s trading firm, Alameda Research, obtained tokens ahead of FTX.com listings, according to a report from blockchain analytics firm Argus. The report claims that Alameda acquired about $60 million worth of tokens before the digital assets were scheduled to be listed on FTX.

A blockchain analytics firm says Alameda had an insider’s advantage a month before the listing on FTX.

Wall Street Journal (WSJ) contributor Caitlin Ostroff detailed on Nov. 14, 2022, that an analysis by blockchain analytics firm Argus indicates that the now-bankrupt Alameda Research had amassed a large stash of tokens ahead of specific FTX listings. Ostroff’s report notes that between March 2021 and March 2022, Alameda acquired $60 million of such crypto tokens from 18 different subsequent FTX listings.

“What we see is that they basically almost always in the month before bought a position that they didn’t have before. Clearly there is something in the market that is telling them that they should buy things that they didn’t have before“, Omar Amjad, co-founder of Argus, told the WSJ.

The article also notes that former FTX CEO Sam Bankman-Fried (SBF) emailed the WSJ in February and said that Alameda had access to the same type of information as most crypto-currency market makers. Ostroff further explains that SBF told the news outlet that “[Alameda] traders did not have special access to customer information, market data, or transactions.“

The news follows FTX’s bankruptcy filing on Nov. 11, 2022, and the filing revealing that FTX International, FTX US, Alameda Research and 131 other entities were included in the Chapter 11 bankruptcy filing. The sources told Reuters that SBF quietly transferred about $10 billion in funds to Alameda. Two people familiar with the matter also explained that at least $1 billion and possibly as much as $2 billion in client funds went missing.

Texting directly to Reuters, SBF told reporters that he “disagreed with the characterization” of the alleged $10 billion transfer of funds to Alameda. “We did not make a secret transfer“, SBF insisted in its SMS. “We had confusing internal labeling and misread it“, the former FTX CEO added. Less than 24 hours after FTX filed for bankruptcy on November 11, the exchange’s wallets were hacked and $477 million in crypto assets were reportedly stolen.