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The collapse of Sam Bankman-Fried’s cryptocurrency exchange FTX has focused attention on the role played by Alameda Research and its CEO Caroline Ellison in the firm’s implosion.

Ellison, 28, was raised by two MIT economists and graduated from Stanford with a degree in mathematics. She met Bankman-Fried at the trading firm Jane Street Capital. Bankman-Fried, like Ellison, was raised by professors and the pair adopted a philosophy of “effective philanthropy”, which involves committing large sums of money to fund philanthropic activities that benefit society to the greatest extent. The two were reportedly involved in an on-and-off relationship, according to CoinDesk,

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CEO Accused of Instigating FTX, Details Sam Bankman-Fried’s ‘Lies’ and ‘Straw That Broke the Camel’ Back

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When Bankman-Fried left Jane Street in 2017 to found her own hedge fund known as Alameda Research, shortly thereafter Ellison took what she called “a blind leap into the unknown.” She became one of the principal traders in the new firm and said Podcasts Related to FTX Joining Almeida was “a good opportunity to leave,” but dealing with capital was “kind of daunting” when she first started at the firm in 2018.

“Mostly, it was something I wasn’t used to thinking about,” she said. “So it was kind of — I don’t know, I think I was kind of a trader, I mean, not that long but a year and a half on Jane Street, which was more trading experience than a lot of Alameda traders. Pass was at the time. I kind of wanted to come in and be kind of an expert on everything, but there was still a lot of stuff in the crypto world that I knew nothing about.”

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Almeida was a prominent trader in the cryptocurrency space and FTX is frequently traded on the platform, according to The Wall Street Journal. Although Bankman-Fried was the founder and majority owner of Almeida, he eventually gave up control of its operations and focused primarily on his role as CEO of crypto exchange FTX, which he founded in 2019. At its peak, FTX carried a valuation of around $32. It was the world’s third largest cryptocurrency exchange by billion and volume.

The fast-paced environment and the rapid growth of both Alameda and FTX increased the pressure on those at the top. The Wall Street Journal previously reported that the use of stimulants was common among the upper echelons of Bankman-Fried. Ellison tweeted last year, “Nothing like regular amphetamine use to make you appreciate how dumb the normal, non-drugged human experience is.”

Sam Bankman-Fried

In October 2021, Alison was Named Co-CEO of Alameda With Sam Trabuco. She will become CEO in August 2022 when Trabuco announced on twitter He was stepping down from the role. Trabuco said that leading Almeida with Ellison was “difficult and exhausting and consuming”, but added that he would “remain on as an advisor.”

Cryptocurrency prices were near all-time highs in the fall of 2021, but in early 2022, digital currencies were in decline and many investment and lending firms in the sector were facing financial pressure.

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By early November of this year, reports were mounting about the financial health of both Alameda and FTX. In an interview with Fox Business’s Susan Li, Binance CEO Changpeng Zhao called a “chaotic” balance sheet after due diligence rival crypto exchange Binance thwarted a tentative plan to acquire FTX.

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The interplay between the two firms ultimately led to their downfall, as FTX loaned billions of dollars of customer funds from the exchange to Alameda in an effort to shore up the firm’s finances. When bewildered investors went to withdraw funds from FTX, it was unable to meet those requests and went bankrupt.

The firm and FTX filed for bankruptcy during a video meeting earlier this month. The Wall Street Journal reported that Ellison informed Alameda’s employees about using clients’ funds to help Alameda meet its liabilities, and that she, Bankman-Fried, and other members of the firms’ leadership were informed of the decision. knew about

Fox Business’s Kayla Bailey and Aislinn Murphy contributed to this report.