Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A6998035477454864384
#FTX #Early #Red #Flags: #US #Senate #Hearings #Perjury? #RiskManagement #Controls: So Much for #Innovation #Smoke & #Mirrors:
#FTX #Fraud: Worse than #Madoff, #Theranos:
https://lnkd.in/g-Pqt-na
Alameda promised ‘high returns with no risk’ in 2018 #pitch #deck: https://lnkd.in/gFkN35Hn
#FREEMONEY #NORISK #PITCH #DECK
Alameda’s 2018 slide deck had some #major #red #flags, according to a legal expert. The firm said it was offering loans with “no downside” and high returns with “no risk.” #Regulatory #redflags tied to Sam Bankman-Fried’s #crypto #trading firm #Alameda #Research may date all the way back to 2018. The #quantitative #crypto #trading firm — which served as the #liquidity #launch #pad for the now #bankrupt #FTX #Group — began soliciting #investors in 2018 through #Telegram group chats and a slide deck that described the opportunity as #RISKLESS, according to several messages and a deck obtained by The Block.
#NODOWNSIDE #DEBT-#LOANS #PROMISE
The 2018 Alameda deck shows the #investment opportunity included a 15% annualized fixed rate loan, with #higher #rates available to investors willing to park more with the firm. These loans have no downside — we #guarantee #full #payment the #principal and #interest, enforceable under U.S. law and established by all parties’ legal counsel, the deck reads.
‘Flashing Red Flag’
“This is a flashing red-flag for investigators, Gellasch, a former #Senate and #SEC staffer, said. These types of documents are likely to be an exhibit in #court #cases.”
PROMISED #HIGHRETURNS WITH #NORISK
Promising high returns with ‘no risk’ is a massive red flag for sophisticated investors and is bound to give rise to #criminal and #civil #investigations. The #offering appears to be akin to an #unregulated #offering of a #debt #security #instrument, he said. Historically, #regulators and #investors look extremely skeptically on low-risk/high return investment opportunities—ESPECIALLY LOW INTEREST RATE ENVIRONMENT.
#US #SENATE #Testimony of #SamBankmanFried Co-Founder and CEO of #FTX “#Examining #Digital #Assets – #Risks, #Regulation, and #Innovation.”: https://lnkd.in/gyAjvr_g :
24/7/365 #RISKMANAGEMENT #CLAIM
Importantly, FTX’s #risk #model avoids the #systemic #warehousing of such #risks over a weekend or other period of market closure, and instead #addresses #at-#risk positions and accounts IMMEDIATELY, in #REALTIME, 24/7/365.
#RISKREDUCING #CUSTOMER #PROTECTION #CLAIM
FTX believes the market structure for digital-asset platforms is risk reducing compared to others because it facilitates more effective risk management and eliminates unnecessary points of failure.
Public policy should permit this one- rule-book model due to its risk-reducing and customer-protection attributes.
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