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Sam Bankman-Fried's Alameda and Voyager Digital Spar in Bankruptcy Court

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CNBC·cnbc.com/2022/08/09/sam-bankman-frieds-alameda-voyager-di...

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Good quality. Reputable source with community review or editorial standards, but less rigorous than peer-reviewed venues.

Rating inherited from publication venue: CNBC

This article covers the financial entanglements between Sam Bankman-Fried's Alameda Research and Voyager Digital during the 2022 crypto collapse, relevant to AI safety discussions around SBF's role as a prominent EA/AI safety funder whose credibility and resources were built on fraudulent foundations.

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Importance: 18/100news articlenews

Summary

This CNBC article details the complex financial relationship between Sam Bankman-Fried's Alameda Research and bankrupt crypto brokerage Voyager Digital, including Alameda's $370M debt to Voyager and subsequent bailout offer. It contextualizes SBF's broader industry consolidation strategy during the 2022 crypto winter, including bids for BlockFi and stakes in Robinhood. The article foreshadows the deeper problems that would later emerge with FTX's collapse.

Key Points

  • •Alameda Research owed Voyager Digital over $370 million while simultaneously attempting to acquire the bankrupt firm through FTX.
  • •The financial relationship between Alameda and Voyager dated back to at least September 2021, predating Voyager's bankruptcy filing.
  • •Voyager filed for bankruptcy after losing over $650 million from exposure to collapsed crypto hedge fund Three Arrows Capital.
  • •SBF was aggressively consolidating distressed crypto assets in 2022, including options on BlockFi and a 7.6% stake in Robinhood.
  • •FTX was privately held, obscuring the extent of its exposure to the broader crypto market downturn.

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Sam Bankman-Fried's Alameda, Voyager Digital spar in bankruptcy court Skip Navigation Markets Business Investing Tech Politics Video Watchlist Investing Club PRO Livestream Menu 

 Key Points Voyager Digital bankruptcy court proceedings and financial documents show a complex relationship between the company and Sam Bankman-Fried's crypto firms. 
 Lawyers from the two sides firms sparred in court Thursday over the FTX bid to buy Voyager.
 Documents reviewed by CNBC show the financial relationship between Alameda and Voyager date back to mid-2021. 
 In this article

 VYGVQ 
 Follow your favorite stocks CREATE FREE ACCOUNT Sam Bankman-Fried, co-founder and chief executive officer of FTX, in Hong Kong, China, on Tuesday, May 11, 2021. Lam Yik | Bloomberg | Getty Images Sam Bankman-Fried became a crypto billionaire and one of the most famous players in the industry by building cryptocurrency exchange FTX into a top site used by traders and investors.

 His company was valued at $32 billion in January and currently has more than a million users averaging a total of nearly $10 billion in daily trading volume. But it's still privately held, so the public doesn't know how badly it's been harmed by the "crypto winter" of the last few months. As a point of reference , Coinbase , which is public, has lost roughly two-thirds of its value this year, and mining company Marathon Digital is down by more than half.

 While Bankman-Fried, who lives in the Bahamas, has the financial benefit of opacity, his exposure to the broader industry washout became readily apparent last week during a five-hour Chapter 11 bankruptcy hearing in the Southern District of New York for beleaguered crypto brokerage Voyager Digital .

 Voyager is among a growing crop of crypto firms to seek bankruptcy protection amid a flood of client withdrawals that followed the plunge in bitcoin , ethereum and other digital currencies. Bankman-Fried's role in the morass is further complicated, because he also controls quantitative trading firm Alameda Research, which borrowed hundreds of millions of dollars from Voyager and became a major equity investor before turning around and offering a bailout package to the firm.

 Meanwhile, Bankman-Fried is trying to play the role of industry consolidator, snapping up distressed assets both as a wager on their eventual recovery and to strengthen his foothold in the U.S. In July, FTX agreed on an option to buy crypto lending company BlockFi , and two months earlier Bankman-Fried disclosed a 7.6% stake in beaten-down trading app Robinhood . Bloomberg even reported that FTX was trying to buy Robinhood, though Bankman-Fried has denied any active discussions are underway.

 watch now VIDEO 2:49 02:49 FTX U.S. President Brett Harrison on launching stock trading for all users Squawk Box Outside of the U.S., FTX bought Japanese crypto exchange Liquid and has been in discussions to acquire the owner of South Korean crypto exchange Bithum

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