Alameda Co-CEO Compared Crypto Trading With Gambling
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The former Co-CEO of Alameda Research reportedly enjoyed poker and blackjack and applied what he learned to the firm’s cryptocurrency trading.
Sam Trabucco — who hasn’t been publicly accused of any wrongdoing — posted a thread on Twitter about aggressive gambling strategies and how he applied them to trading, Bloomberg reported Tuesday (Nov. 22).
Embracing risk contributed to the fall of Alameda Research, the now-bankrupt trading firm affiliated with crypto exchange FTX, according to the report.
“Bigger is Bigger (when Betting is Better),” Trabucco said in the first tweet in the thread.
“Getting it in good is a poker term referring to the idea that, when your odds are best (strictly speaking, EV of winnings, not odds per se), you wanna bet more,” he added in the second.
Trabucco left Alameda Research in August, saying in a thread on Twitter that he had been reducing his role there for months and no longer wanted to invest the time required to be Co-CEO. Caroline Ellison then became the sole CEO of the firm, according to the report.
The concerns about Alameda Research’s solvency that ultimately led to the fall of the firm, FTX and about 130 FTX-affiliated firms emerged in early November.
As PYMNTS reported Tuesday, reports that Alameda Research was significantly exposed to FTX’s FTT token, which underpinned its apparent solvency, and not an independent asset such as a fiat currency or a third-party cryptocurrency was the beginning of FTX’s road to bankruptcy.
In response to the news, rival crypto platform Binance began to unload a nearly $2 billion equity stake in FTX held primarily in FTT token, leading to a “run” on FTX, with the exchange’s customers withdrawing $6 billion, crashing the price of FTT tokens by 72%.
FTX, which is scheduled to appear in bankruptcy court Tuesday, said recently it owes $1.45 billion to its top 10 creditors alone.
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