Former FTX CEO May Have Influenced Alameda Research to Invest $1.15B in Mining Firm Genesis Digital

UTC by Mayowa Adebajo · 2 min read
Former FTX CEO May Have Influenced Alameda Research to Invest $1.15B in Mining Firm Genesis Digital
Photo: Unsplash

Alameda consulted troubled entrepreneur Sam Bankman-Fried before investing in Genesis Digital.

A new report has surfaced about a capital injection of over $1.15 billion that was carried out by Sam Bankman-Fried‘s Alameda Research. This was prior to the time that crypto prices began heading for the rocks. According to the report, the capital, which is Alameda Research’s biggest venture investment to date, was put into Bitcoin mining firm Genesis Digital Assets. Although, according to another Bloomberg report dated December 3, the $1.15 billion investment wasn’t done in a singular instance. The report claims that the capital injection came in four different spates, albeit across a nine-month period. That was between August 2021 and April 2022.

The first capital injection by Alameda into Genesis Digital was a $100 million investment that took place in August 2021. That was followed by a $550 million investment in January and two similar investments of $250 million each in February and April 2022.

SBF Admits to Influencing Alameda Research’s Investment Decisions

Meanwhile, former FTX CEO Sam Bankman-Fried (SBF) has also owed up to the role he played in some of the investment decisions of Alameda Research — FTX’s sister company, in times past. Particularly, the one involving US-based mining firm Genesis Digital. His revelation comes at a time when Alameda is visibly at the center of the exchange’s bankruptcy issues. And it also shows a deviation from his earlier stance on the subject. Recall that SBF had earlier told regulators that he did not participate in any of Alameda’s venture decisions.

However, he has now admitted to being consulted at every point in time, before any major decisions were carried out.

Whereas, other than the fact that crypto prices have now plummeted, the mining sector is none the better. Rising energy costs and the bear market have almost made the entire sector unprofitable. And that’s saying the least.

To put that into perspective, recent reports show that mining revenue has fallen to two-year lows of $11.67 million. And to make matters even worse, the recent FTX crisis and the relentless crypto winter have all but eroded whatever may be left of investors’ confidence in crypto.

Blockchain News, Business News, Cryptocurrency News, Investors News, News
Related Articles