Alameda Research
Alameda’s Trabucco forfeits Yacht, $70m in claims to FTX estate
Former Alameda co-CEO Sam Trabucco will forfeit real estate and luxury assets to the FTX, according to a proposed settlement filed in court.
Documents disclosed on Nov. 11 revealed that the elusive Trabucco was poised to forgo two San Francisco apartments worth $8.7 million, a super yacht valued at $2.5 million, and disputed customer claims of $70 million to the defunct crypto group.
Court filings regarding the proposed agreement between the FTX estate and Alameda’ Trabucco noted that the executive received $40 million in “potentially avoidable transfers” as part of Sam Bankman-Fried’s crypto empire within two years.
Trabucco was one of Bankman-Fried’s closest comrades in his blockchain enterprise. As co-CEO of Alameda, he led SBF’s hedge fund alongside Caroline Ellison and was part of FTX’s top execs.
Alameda’s joint boss mysteriously left the company in August 2022, months before Bankman-Fried’s firms filed for bankruptcy in November.
SBF was arrested and tried in a Manhattan court. Alameda/FTX tops shots like Ellison, Gary Wang, and Nishad Singh signed plea deals with federal prosecutors in exchange for judicial leniency.
Bankman-Fried was sentenced to 25 years in prison, while Ellison received a two-year supervised release term for her role in America’s largest crypto fraud. Wang and Singh appealed for no jail time as the pair await sentencing.
Trabucco never reportedly signed a plea agreement or appeared to testify in court despite being employed at Alameda during a period of asset commingling and illegal practices. The one-time Alameda CEO has ducked the media spotlight throughout FTX’s saga, and now seemed bound for an unknown future post-SBF.
The FTX estate prepared to disburse about $16 billion to creditors following concluded court cases. FTX lawyers continued to pursue asset recovery, launching lawsuits against Binance founder Changpeng Zhao and centralized exchange Crypto.com.
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FTX, FTX Digital Markets and former Alameda Research co-CEO Sam Trabucco have reached a settlement agreement in the United States Bankruptcy Court for the District of Delaware. Trabucco has maintained a low profile since leaving FTX just months before its collapse.
Agreeing to save time and money
In a motion that will be heard on Dec. 12, the parties agreed that Trabucco will transfer the titles to two apartments in San Francisco worth $8.7 million and his 53-foot yacht worth $2.5 million to FTX Debtors. In addition, he will drop claims against FTX worth $70 million and FTX will release him from any claims it had as well.
These decisions come after “constructive, arm’s length negotiations.” If forced into litigation, Trabucco would have defenses and claims that would lead to lengthy and costly proceedings. The motion states:
“The proposed settlement likely would generate more value to the Debtors’ estates on a risk-adjusted basis than the Debtors could recover if they were to initiate an adversary proceeding against Trabucco and obtain a favorable judgment against him.”
Objections to the proposed settlement can be filed through Nov. 26.
FTX settlement motion. Source: Court Listener
Related: 15 crypto leaders make the cut for Forbes 30 Under 30
A well-timed departure
Trabucco resigned from his position at Alameda Research in August 2022. He was hired as a trader and assumed the co-CEO role in August 2021.
“Alameda is an awesome place — the problems we solve here remain the most interesting I am aware of, and the team remains the most impressive I’ve ever known,” he wrote in a tweet announcing his departure.
Source: FTX Historian
FTX collapsed three months after Trabucco’s departure. He was not heard from during the criminal proceedings against the FTX upper management, and United States authorities did not file charges against him. There was speculation about Trabucco’s knowledge of or participation in the wrongdoing at FTX.
Trabucco wrote a letter to the court asking for leniency in the sentencing of former FTX Digital Markets co-CEO Ryan Salame in May.
Magazine: Tiffany Fong flames Celsius, FTX and NY Post: Hall of Flame
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Worldcoin, the crypto project co-founded by OpenAI’s CEO Sam Altman, recently saw its token’s price drop over 6% following Alameda Research’s continued sales. Some analysts believe WLD’s price could continue to move sideways before recovering its bullish momentum.
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Alameda Goes On A Worldcoin Sell-off
On-chain data analysis firm SpotOnChain revealed that Alameda Research has sent part of its WLD holdings to crypto exchanges for the past two months. The report shared that, since early August, FTX’s sister company has transferred 1.56 million WLD tokens to Binance.
The firm has sent around 143,770 WLD tokens, worth around $2.51 million, every week since August 9, selling the tokens in 10 batches at an average price of $1.6. The news came two days after US Bankruptcy Judge John Dorsey approved FTX’s repayment plan.
The approval allows the crypto exchange to pay customers between $14.7 billion and $16.5 billion in recovered crypto assets. Alameda received around $8 billion of FTX users’ misappropriated funds, allegedly used for the fund’s trading operations.
Some suggest that the sell-off is linked to FTX’s repayment plan, which is expected to start soon and could signify further selling pressure from the companies. Per SpotOnChain’s report, Alameda’s wallet holds 23.44 million WLD tokens worth around $43 million.
At its current selling rate, it could take over three years to completely unload Alameda’s Worldcoin holdings. Additionally, other altcoins could face selling pressure from the company.
The wallet holds $98.8 million in other cryptocurrencies, including 100.9 million Stargate Finance (STG), 1.78 million Mantle (MNT), and 98.86 million BitDAO (BIT), now MNT. The company’s BIT holdings, valued at $68 million, could start being sold in November, as the 3-year no-sale commitment with BitDAO ends.
WLD Price Reacts To The News
Following the sell-off report, Worldcoin saw a 6% dip in the daily timeframe. The token’s price dropped from the $1.98 mark to the $1.77 support zone in the last 24 hours, representing a 4.5% decline in WLD’s biweekly performance.
The cryptocurrency registered a remarkable 31% weekly surge in late September after Worldcoin announced its expansion to three new countries. As reported by NewsBTC, the crypto project revealed it was bringing its World ID services to Guatemala, Poland, and Malaysia.
The news, alongside the crypto market’s recovery, propelled the token’s price above the $2 mark, which was momentarily held. Since then, the token has struggled to reclaim the key support zone, hovering between $1.58-$2.03 levels for the past week.
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Crypto analyst Yuiry from BikoTrading noted that WLD’s price retested the $1.5 crucial level after October 1’s drop, bouncing around 33% from this level. As the token continues trying to retest the $2 resistance level, the analyst expects it to move within its new $1.8-1.98 range for a few days before breaking above it.
As of this writing, WLD is trading at $1.8, an 8.7% and 27.4% increase in the weekly and monthly timeframes.
Featured Image from Unsplash.com, Chart from TradingView.com
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Prosecutors and the defense alike argued Caroline Ellison should be sentenced to time served—and without her, the scale of Sam Bankman-Fried’s crimes may never have been uncovered.
Caroline Ellison was a key member of Sam Bankman-Fried’s inner circle, turning into a star witness against him during a high-stakes trial last year.
Ellison was the former CEO of Alameda Research, the sister trading firm of FTX, which collapsed in 2022 after a multibillion-dollar black hole emerged in the exchange’s finances.
A damning investigation later revealed that FTX customer funds had been used to make risky bets without the customers’ knowledge, with Alameda being given a secretive “backdoor” that allowed the hedge fund to withdraw seemingly endless amounts of money.
While she could have faced up to 110 years behind bars, an early guilty plea made it unlikely she’d spend the rest of her life in prison—and in a rare turn of events, both the prosecution and the defense called for her to be sentenced to time served.
At a courtroom in Manhattan on Tuesday, Ellison apologized to all those who lost money at FTX. She said “not a day goes by” where she doesn’t reflect on the harm caused to the many innocent victoms.
“The human brain is truly bad at understanding big numbers. I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us.”
Ellison
In a sympathetic note to Judge Lewis Kaplan, prosecutors praised her “extraordinary cooperation with the government” and said this should be reflected in her punishment. The note concluded:
“The government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment. The attendant professional consequences of this level of notoriety are obvious and unlikely to be shortlived. Throughout, however, and certainly during her testimony, Ellison steadfastly remained candid and dedicated to telling the truth—as embarrassing as it often was for her—and in assisting with bringing the most culpable party to justice.
At the hearing, the judge declared that Ellison had been “very incriminating of herself,” consistent in her testimony, and a 110-year term would be “absurd.”
However, the judge concluded that she was “by no means free of culpability” and sentenced her to two years in prison.
Why prosecutors praised Ellison
Faced with Bankman-Fried’s “systematic destruction of evidence,” prosecutors argued that Ellison provided “credible and detailed information” about her significant role in his crimes, allowing them to establish a clearer picture of his wrongdoing.
It was also noted that Ellison had cautioned SBF against Alameda’s aggressive borrowing, predicting that the firm would eventually have to use FTX funds if the market turned.
“As FTX collapsed, Bankman-Fried persisted in publicly denying knowledge and fault. Ellison, on the other hand, expressed relief that the fraud was exposed, and responsibility for her wrongdoing,” prosecutors wrote in their sentencing remarks. The judge agreed that she had cooperated fully, while Bankman-Fried was “the opposite.”
After making her way through an almighty paparazzi scrum during the three days she gave evidence, Ellison spoke of her on-off relationship with SBF, directly accused him of committing crimes, and claimed his unkempt appearance was a deliberate attempt to boost FTX’s image.
Her testimony played a pivotal role in Bankman-Fried’s conviction and subsequent 25-year prison sentence for defrauding customers and investors. He is currently appealing his punishment.
Pointing out that many of the allegations would have been difficult to prove without her help, prosecutors added: “The timeliness of Ellison’s cooperation contributed to the speed with which the government was able to indict Bankman-Fried, ensuring that he did not flee the Bahamas or further obstruct the government’s investigation.”
While some argue that Ellison’s sentence is unduly lenient, prosecutors emphasized that she would face consequences for years to come.
They noted that Bankman-Fried had leaked her private writings to The New York Times in an attempt to undercut her testimony — and delicate details she had shared to a therapist had ended up appearing in Going Infinite by Michael Lewis. Prosectuors wrote last week:
Her physical appearance was scrutinized and criticized, and she was mocked in memes and other content on social media. Numerous films and TV shows are in production about the downfall of FTX, which will only perpetuate the public scrutiny Ellison has faced to date … the attendant professional consequences of this level of notoriety are obvious.
Ellison’s lawyer added that their client “will carry shame and remorse to her grave” — and Bankman-Fried had a direct role in warping her moral compass.
Anjan Sahni went on to note that she was also affected when FTX suddenly suspended withdrawals and careened into bankruptcy, as “the vast majority of her savings” were on this platform.
“She will never profit from her role in this crime,” Sahni added.
Ellison, who turns 30 in November, was portrayed as someone focused on rebuilding her life through volunteering and writing a math textbook. It is unlikely she will retain any of the earnings she made at Alameda Research. Her legal team wrote:
Caroline’s participation in the criminal conspiracies at Alameda Research is a dramatic departure from her otherwise law-abiding nature. She poses no risk of recidivism. Sending Caroline to prison is entirely unnecessary, either for specific deterrence or to safeguard the public. Caroline is unlikely to reoffend because she did not commit these crimes out of greed.
There is no discounting the seriousness of Ellison’s crimes or her role in damaging the financial health of countless FTX customers. But in the eyes of both the prosecution and the defense, she was also crucial in untangling the mess that followed.
Almost two years on, and 98% of those owed money by this doomed exchange are receiving their initial investments in full — along with an additional 18% on top as compensation.
The outcome could have been very different had Ellison not cooperated so closely—reflected in the sentence she received.
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