{"id":16455,"date":"2023-01-14T16:28:38","date_gmt":"2023-01-14T16:28:38","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/bitmex-co-founder-criticizes-former-ftx-ceo-for-not-liquidating-hedge-fund-alameda-bitcoin-news\/"},"modified":"2023-01-14T16:28:38","modified_gmt":"2023-01-14T16:28:38","slug":"bitmex-co-founder-criticizes-former-ftx-ceo-for-not-liquidating-hedge-fund-alameda-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/bitmex-co-founder-criticizes-former-ftx-ceo-for-not-liquidating-hedge-fund-alameda-bitcoin-news\/","title":{"rendered":"Bitmex Co-Founder Criticizes Former FTX CEO for Not Liquidating Hedge Fund Alameda \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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The Bitmex co-founder, Arthur Hayes, criticized Sam Bankman-Fried, the disgraced FTX co-founder, on Friday after Bankman-Fried published his first blog post on his new Substack newsletter. \u201cAll this talk about what Alameda did is misdirection,\u201d Hayes insisted. \u201cIt doesn\u2019t matter how they hedged or didn\u2019t hedge, or what dogsh** was in their portfolio.\u201d<\/strong><\/p>\n

Bitmex Co-Founder Accuses Former FTX CEO of Avoiding Transparency<\/h2>\n

Arthur Hayes<\/a>, co-founder of the cryptocurrency derivatives platform Bitmex, criticized Sam Bankman-Fried, former CEO of FTX, following a recent blog post. In the blog post<\/a>, Bankman-Fried said \u201cAlameda failed to sufficiently hedge its market exposure\u201d and \u201can extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent.\u201d Hayes, a prominent member<\/a> of the cryptocurrency community, has significant knowledge about cryptocurrency derivatives exchanges, as Bitmex was one of the largest since its inception in 2014.<\/p>\n

\u201cThe exchange should never lose money if a customer gets liquidated,\u201d Hayes tweeted<\/a> on Friday. \u201cThere is no excuse [for] giving [your] hedge fund Alameda an account with liquidation turned off. All this talk about what Alameda did is misdirection. It doesn\u2019t matter how they hedged or didn\u2019t hedge, or what dogsh** was in their portfolio,\u201d the Bitmex co-founder added.<\/p>\n

Hayes then told Bankman-Fried if he truly wanted to explain what happened, he should tell the community why he thought it was a good idea to give his hedge fund an account with the liquidation feature turned off. Former Alameda CEO Caroline Ellison\u2019s statements<\/a> explain that she fully \u201cunderstood that executives had implemented special settings on Alameda\u2019s FTX.com account that allowed Alameda to maintain negative balances in fiat currencies and cryptocurrencies.\u201d<\/p>\n

Alameda\u2019s Negative Balance Account: An Enigma Wrapped in a Mystery<\/h2>\n

Furthermore, Bitcoin.com News reviewed<\/a> a document that allegedly belonged to Ellison that shows the former Alameda CEO had a leveraged FTX trading account that was in the red by negative $1.3 billion in May 2022. Hayes emphasized that if Alameda was removed from the equation through a legitimate liquidation, Bankman-Fried\u2019s now-defunct exchange could still be operational. \u201cIf you had liquidated Alameda like any other FTX punter, FTX would still be operational. It\u2019s just that simple,\u201d Hayes tweeted<\/a>. The Bitmex CEO added<\/a>:<\/p>\n

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So stop talking about Alameda and tell us how you approached risk management at the FTX level. Why were some clients treated differently than others. I am keen to understand why you thought turning off liquidation on a $bn notional position was prudent.<\/p>\n<\/blockquote>\n

Many people responded to the Twitter thread written by Hayes, and one person wrote<\/a>: \u201cUsers paid for Alameda\u2019s negative account equity. Shameful.\u201d Others repeated Hayes\u2019s sentiment, saying<\/a> \u201cit really is just that simple.\u201d \u201cIt\u2019s really the most basic question SBF keeps skirting around. At least he said he was sorry,\u201d another person added<\/a>.<\/p>\n

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\nTags in this story
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Account<\/a>, alameda<\/a>, Alameda Research<\/a>, Arthur Hayes<\/a>, BitMex<\/a>, Bitmex Co-Founder<\/a>, Bitmex Exchange<\/a>, Blog Post<\/a>, cautionary tale<\/a>, Clients<\/a>, co-founder<\/a>, comments<\/a>, community<\/a>, Cryptocurrency<\/a>, customer<\/a>, derivatives<\/a>, Enigma<\/a>, Former FTX CEO<\/a>, FTX Exchange<\/a>, hedge fund<\/a>, hedged<\/a>, insolvent<\/a>, Liquidation<\/a>, misdirection<\/a>, Mystery<\/a>, Negative Balance<\/a>, newsletter<\/a>, not liquidating<\/a>, platform<\/a>, Portfolio<\/a>, risk management<\/a>, Sam Bankman-Fried<\/a>, Substack<\/a>, thread<\/a>, Transparency<\/a>, Twitter<\/a><\/div>\n<\/div>\n

What are your thoughts on the criticisms shared by Bitmex Co-Founder Arthur Hayes against former FTX CEO Sam Bankman-Fried? Share your thoughts in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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