Alameda Research

Alameda Research was a crypto trading firm founded in 2017 by Sam Bankman-Fried, who later started the exchange FTX. Alameda traded, made markets and invested across the crypto world, and was run for a time by Caroline Ellison.

The two companies were supposed to be separate. They were not. Alameda had been quietly using money that FTX customers had deposited, and when a leaked balance sheet sparked a run on FTX in November 2022, the hole was exposed. Both firms went bankrupt within days, and the fallout dragged down lenders and funds across the industry.

The lesson for traders is a blunt one: an exchange is only as safe as what it actually does with your deposit, and you usually can't see that from outside.