The trading company Alameda Research made some strange investments in the months leading up to its stunning collapse.
Unorthodox investments
Reports indicate that crypto exchange FTX secretly diverted some $4 billion in corporate funds in the months leading up to its spectacular demise. It did this to support its struggling sister trading firm, Alameda Research. Now a clearer, but also stranger, picture is beginning to form of where that money may have gone.
On Tuesday, the Financial Times released details of Alameda’s approximately $5.4 billion investment portfolio. More than 500 illiquid investments have been made by the company in 10 companies since it began last month.
While the majority of the companies listed were crypto and decentralized finance companies, the documents reveal that Alameda also handed out large amounts of money to projects and companies well beyond the company’s declared Web3 mandate.
Alameda, for example, invested $25 million in the “80 Acres” company. This is a manufacturing company that specializes in growing and selling lettuce and strawberries in the Ohio area. This it did for an undisclosed equity in the company.
The company also allocated $500,000 to Equator Therapeutics, a weight loss drug development company. In addition, it allocated $1.5 million to Ivy Natal, a San Francisco-based fertility company.
Some investments were even further out of proportion. For example, Alameda donated $1 million for a 5% stake in Fern Labs Inc., a New York-based chemical company that appears to be selling counterfeit versions of lotions once sold by the long-defunct Goubaud de Paris cosmetics brand.
Alameda also allocated a lot of money to Chinese media companies. The company spent $5 million on a 25% stake in Chinese crypto news site ODaily. In addition, it spent $3.56 million on a 30% stake in BlockBeats, another Chinese Web3 digital news site.
The company invested $1.2 million in Trustless Media, the company behind Coinage, an NFT-backed news show.
Huge losses
Alameda reportedly suffered huge losses after the massive crypto crash in May. FTX’s CEO at the time, Sam Bankman-Fried, tried to cover up these losses. It remains unclear how much money Alameda has lost over the years through its numerous investments.
According to Bankman-Fried, Alameda’s financial decisions were overseen exclusively by the company’s CEO, Caroline Ellison.
Ellison, who met several times with Bankman-Fried has dated, living with him and eight other executives from FTX and Alameda in a penthouse in the Bahamas. Twitter users have now spotted her in New York.
In the wake of the collapse of FTX and Alameda, Bankman-Fried, founder of both companies, has stated that he was not involved in Alameda’s investment decisions. Yet data shows that the two companies have been connected for some time in the choices made around investments.