SBF: Alameda Has The Highest FTX Borrowing Limits

Former FTX CEO Sam Bankman-Fried (SBF) stated that Alameda Research obtained a greater loan limit when compared to other FTX customers, although he did not disclose the breadth of the limit. 

Since Alameda functioned as FTX’s primary liquidity provider at the start of its existence, other financial groups were not interested at the time. Furthermore, SBF estimates that Alameda’s liabilities to FTX were around $10 billion at the time of the bankruptcy filing.

When compared to other FTX clients, trading business Alameda Research was offered excessive borrowing restrictions. When Sam Bankman-Fried created the crypto exchange, Alameda was able to access large levels of financing on FTX, he said in a Financial Times interview published on Saturday.

He didn’t say how large the constraints were in comparison to other clients, but he did say they may have remained after FTX was founded.

The substantial borrowing restrictions resulted from Alameda’s role as a primary generator of liquidity on FTX at its inception, before other financial groups expressed interest, he explained.

“If you go back to 2019 when FTX originally launched, Alameda was 45 percent of volume or something on the platform at the time. Basically, if Alameda’s account ran out of capacity to take on new positions, it would cause risk issues for the platform because we didn’t have enough liquidity providers. As a result, I believe it had quite broad constraints.” SBF remarked in the interview.

He noted that by 2022, Alameda would account for only 2% of FTX trading volume. According to the discredited founder, Alameda’s liabilities to FTX were around $10 billion at the time of its bankruptcy filings. This is the latest in a series of media statements SBF has made since FTX filed for Chapter 11 bankruptcy protection last month.

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