Alameda Research Suddenly ‘Goes Dark’ On Crypto Trades, Source Says

Michael Bodley
Michael Bodley November 10, 2022
Updated 2022/11/10 at 2:57 AM
3 Min Read

Embattled crypto proprietary trading and venture capital firm Alameda Research has gone dark and stopped trading with at least one regular counterparty, according to a source familiar with the matter.

Once high-flying traders at Alameda, owned by FTX CEO Sam Bankman-Fried, spent most of Tuesday unwinding a slew of positions in an attempt to ease mounting liquidity issues exacerbated by market turmoil surrounding Binance’s sudden move to acquire FTX. That deal has since fallen through.

Alameda, meanwhile, has taken down its website, which now reads, “this site is currently private.” And there’s an expectation of a pending leadership shakeup, a second source said — following executive turnover earlier this year.

“The great crypto reset is here,” the source said. “Dark days ahead.”

The source categorized Alameda’s rapid move as “highly unusual,” pointing to the fact that the trading firm still has a great deal of open positions on its balance sheet. The asset manager stopped trading with one — and likely two — trading partners Wednesday morning in New York after being in near-constant communication with its counterpart desks yesterday, the source said.

A spokesperson for Alameda declined to comment. The source was granted anonymity to discuss sensitive business dealings.

“They were incredibly engaged sellers in the market rout yesterday,” the source said. “They had to be. It’s unusual for them to [out of nowhere] stop responding to me. It’s super, super rare.”

What led to the unexpected trading halt isn’t clear.

Possible explanations include:

  • A directive from senior management to wait for markets to settle, considering both Alameda and FTX have been hammered by the plunging price of the exchange’s native token, FTT.
  • A wait-and-see approach on the outcome of the Binance acquisition of FTX, which has now been resolved. Binance pumped the brakes on what had been a pending purchase, Blockworks reported.
  • There’s been chatter among deep-pocketed industry participants — including TradFi players — that Alameda’s insolvency woes are deeper than has previously been reported, suggesting a vulture-style purchase of the firm could be possible. A second source said institutional asset managers have been inquiring about snapping up the firm’s cryptoassets at bargain-basement prices, as well as broaching the idea of an outright acquisition.

The post Alameda Research Suddenly ‘Goes Dark’ On Crypto Trades, Source Says appeared first on Blockworks.

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