The close ties between crypto exchange FTX and its affiliated trading firm, Alameda Research, were well known throughout the industry, investors and industry executives have told Fortune.
Alameda was a quantitative trading firm founded by Sam Bankman-Fried in 2017. The company, known for aggressive trading strategies, offered crypto trading in every market and was led by CEO Caroline Ellison. In 2019, FTX spun out of Alameda and was backed by some of the biggest names in the venture world, including Tiger Global, SoftBank, and Sequoia Capital. The exchange was valued at $32 billion in January, notable since venture funding rounds at that time had started to decline. FTX had about 1 million users and employed roughly 300 people, including U.S. and international, a spokesman said Thursday.
Her worldoptimization post reads: "A pretty good conclusion to the series.
Biggest pro was the resolution of mysteries/open questions from the first two books. It wrapped everything up in a way that felt very satisfying.
"Biggest con was … I think I felt less bought into the ethics of the story than I had for the previous two books?
The first two books often have a vibe of “you can either do the thing that’s easy and safe or you can do the thing that’s hard and scary but right, and being a good person is doing the right thing.” And I’m super on board with that.
"Whereas if I had to sum up the moral message of the third book I might go with “there is no ethical consumption under late capitalism.” It turns out the world economy is built on systemic exploitation of the vulnerable, and everyone who participates in it is complicit, and the way to be a good person is to burn the system to the ground and replace it with one that’s less problematic even if it requires a substantial decrease in global standards of living.
"And like I think that’s likely true in the Scholomance universe? But I think it’s a bad analogy for the real world. And I think it makes for less satisfying conflict: I’d much rather see El wrestling with her own worst impulses than El being self-righteous at anyone who isn’t vegan eco-friendly fair trade strict mana."
CEO of Alameda Research is a 28-year-old Harry Potter fan
It's a bad day and week for millennials in crypto. 30-year-old Sam Bankman-Fried (SBF) has already lost 94% of his fortune and is facing questions as to the probity of his actions after the Wall Street Journal reported that his crypto exchange, FTX, lent $10bn to his affiliated trading firm, Alameda Research. Constance Wang, the 28 year-old ex-Credit Suisse analyst running the day-to-day operations of FTX is presumably sharing the pain. Caroline Ellison, another 28-year-old SBF protégé already appears to be out of a job.
Ellison was CEO of Alameda Research, which is being wound down as of this afternoon. Alameda was a crypto market maker with a reputation for aggressive trading strategies. SBF confessed today that these were being funded by money customers had deposited in FTX for their own trading purposes.
There's no indication that Ellison did anything illegal, and it's not clear which role she played in the use of FTX customer funds, if any, but she doesn't seem to have had a huge amount of experience prior to running a firm with an alleged $10bn of money sloshing around.
Before joining Alameda as a trader in March 2018, Ellison spent 19 months as a junior trader at Jane Street after graduating from Stanford University with a bachelor's degree in mathematics in 2016. In a podcast two years ago, Ellison explained that Jane Street was her first job out of college. A diehard mathematician and Harry Potter fan born of two economists, Ellison she hadn't wanted to go into trading but "just didn't really know what to do" with her life.
She was persuaded to join Alameda by SBF, who also previously worked for Jane Street. When she quit Jane Street, Ellison said she felt bad for staying such a short amount of time. However, this feeling quickly dissipated when she arrived at Alameda and discovered that she had "kind of more trading experience than a lot of Alameda traders," anyway.
In light of what has transpired, Ellison's podcast sounds a lot like a list of reasons why you need some experienced people around to help with decision-making. She says she was "kind of thrown into" making decisions at Alameda and that this was a shock after her 19 months at Jane Street where the decisions she'd made had been "pretty circumscribed." By comparison, in a start-up like Alameda, Ellison said she found herself making "a bunch of decisions," a lot of which were "really uncertain," and that this was "terrifying."
As FTX implodes and the crypto sector goes from winter to the potential eternal darkness and icy freeze of a heavily regulated black hole, financial services boomers are feeling some schadenfreude. Richard Handler, CEO of Jefferies, says on Instagram that he reached out to Sam Bankman-Fried with rescue advice in July. SBF didn't respond. "Just like a broken clock, even a boomer can be right sometimes," reflected Handler today.
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