Sam Bankman-Fried’s Empire Was Crushed by This Infamous Balance Sheet. Here’s More of the Story

As we gear up for Sam Bankman-Fried’s day in court, it seems prudent to step back and unpack what happened in late 2022 that got us here today:

It is one of the most consequential documents in financial history, given that it caused the collapse of a $32 billion empire in just nine days and now to a highly anticipated criminal trial.

“It” is the infamous balance sheet of Sam Bankman-Fried’s trading firm, Alameda Research. Its explosive contents served as the basis for a Nov. 2, 2022, story by CoinDesk’s Ian Allison. The article raised questions about how sturdy the company’s financial underpinnings were – and, by extension, how safe Bankman-Fried’s better-known crypto exchange FTX was.

It turns out, not at all.

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For the protection of our sources we are not publishing the document itself but rather describing its contents – in finer detail than ever before. Labeled “Consolidated Balance Sheet 2022 Q2,” it gets into the nitty gritty of Alameda’s knotty empire.

Much of that empire relied on tokens of projects Alameda was unusually close with – particularly the formerly white-hot crypto startups it invested in. For example, it led eight-figure investment rounds in the closely linked projects Oxygen and Maps.me and counted nearly $600 million worth of those projects’ tokens (locked and unlocked) on its balance sheet. When FTX went bust it stranded 95% of those projects’ token supply in a state of limbo that seems to continue to this day. Those projects’ tokens have since lost much of their value but even back then they were unlikely to be worth that much in practice. Attempting to trade them at scale on the open markets would have shattered their value.

Alameda had multiple ties to Bonfida, the project behind Solana’s version of ENS, the popular wallet naming service in the Ethereum ecosystem. It was the primary market-maker for Bonfida’s native token FIDA. It acquired millions of FIDA tokens by investing in that startup. Notably, Bonfida developers inherited development duties over the purportedly decentralized Serum crypto exchange, another FTX…