Sources detail Alameda's early years, starting in fall 2017, as SBF shrugged off concerns about risky investments, leading several employees to quit in 2018
‘We ended up not really knowing how much money we even had,’ one former employee says — Why FTX Picked the Bahamas, and What Happens Now to the Crypto Hub
Wall Street JournalGregory Zuckerman
Context & Ripple Effects
The early account of weak financial visibility and ignored risk concerns extends the timeline behind staff reports of conflicts of interest and weak oversight at FTX and Alameda. It suggests those governance problems were not confined to the firms' final crisis.
Alameda lost several employees in 2018 after concerns over risky investments went unaddressed, while SBF retained control over the approach those employees challenged.
The former employee's account indicates that Alameda's own financial visibility was inadequate during its formative period, limiting internal confidence in its risk position.
Second-order effects
The reported early opacity makes later accounts of conflicts, weak oversight, and FTX-Alameda fund transfers more consequential, because they describe issues within an organization already said to have struggled to track its finances.
For FTX and Alameda, the combined reporting shifts attention from a single market downturn toward management controls and the relationship between the affiliated firms.
Third-order effects
If similar accounts continue to surface, crypto firms seeking institutional legitimacy will face greater pressure to separate trading activities from customer-facing platforms and demonstrate auditable internal controls.
The pattern strengthens the case that governance failures at closely connected crypto businesses can compound over years before becoming visible to customers, counterparties, and authorities.
The trend: The FTX-Alameda coverage is part of a broader crypto legitimacy gap in which opaque governance and affiliated-party relationships become central risks as firms scale.
Alameda Research's reputation was at no point “pristine”. Even earlier this year many had warned that there were conflicts of interest, and multiple users had publicly reported FTX deposits being routed through Alameda (the kind of thing a bank should care about) https://t.co/ImX…
I think “he set up a trading system but rejected the idea that it should keep track of gains and losses”, if accurately quoted, is pretty difficult to reconcile with having ever had any good faith intention to run a business. https://twitter.com/...
2018 —> Years before Sam Bankman-Fried's crypto empire collapsed, a group of employees quit after becoming concerned about what they say was his cavalier approach to risk, compliance and accounting via @GZuckerman https://www.wsj.com/...
Every new revelation I assume we've reached the bottom. And every new revelation I learn that SBF was even worse than we knew before. https://twitter.com/...
@GZuckerman “According to documents written by Mr. Bankman-Fried, dated 2018 and viewed by the Journal, Mr. Bankman-Fried acknowledged that Alameda's lack of accounting and risk controls led to trading losses.” This does not bode well for the “but I don't code” defense.
Sam Bankman-Fried faced an employee exodus at his Alameda firm years before his crypto empire collapsed. Staffers said his approach to risk concerned them. https://www.wsj.com/...
NEW from me: Years before Sam Bankman-Fried's crypto empire collapsed, a group of employees quit after becoming concerned about his cavalier approach to risk, compliance and accounting. https://www.wsj.com/...