A former engineer at Alameda Research has come forward with a shocking story about his time there. He talks about how the collapse of FTX caused him to lose his entire life savings. Aditya Baradwaj has decided to tell his story after he has had time to recover from the FTX mess.
The engineer’s story starts with his first meeting with Sam Bankman-Fried, the company’s founder and former boss. After leaving a job at Google, it was his first day at the office, and he was very excited to join this mysterious and relatively unknown crypto trading firm.
During that time, most people didn’t know much about Sam or the companies he worked for, such as Alameda and FTX. Even though FTX was becoming a major player, it wasn’t widely known, even in the tech world. The engineer found out about the company through word of mouth from former Berkeley students who had worked at the company.
The office itself was on the fourth floor of a regular office building in downtown Berkeley. It didn’t look like much. Even though the place was small, a lot of crypto trading went on there.
Even though Sam was said to be running FTX full-time, the engineer remembers that there was a clear connection between Alameda and FTX. Both groups worked out of the same offices, went to the same events, and even lived together. These close ties set up a web of complicated relationships that would later play out.
When the engineer met Sam for the first time, he noticed that what he said didn’t make sense. Sam talked about how great decentralized finance was, but he ran a custodial derivatives exchange that was more centralized. The engineer’s life would be full of these kinds of contradictions.
Sam talked about his plans to move the whole company to a remote island in the Bahamas during a casual conversation. He used the GDP of the Bahamas as a way to show how strong FTX’s finances were. Sam’s big goals also showed that he was a visionary. For example, he wanted to set up a vaccine factory in the Bahamas to get around FDA delays. He also wanted to get people to give money to political campaigns and accept unusual ideas like iterative embryo selection.
The engineer also observed a distinct facet of Sam that exhibited financial recklessness, which intrigued and resonated with his colleagues. Some cases of careless risk management, technical debt, and wasteful spending cast a shadow over the bright promises.
The journey ended when FTX went bankrupt, leaving customers, investors, and employees in a lot of financial trouble. Sam wanted to create a powerful force for good, but the FTX headquarters on the shores of Nassau was still not finished. Sam himself got in trouble with the law and ended up in jail for breaking the rules of his house arrest.
Even though there is a lot of talk and interest about FTX and Alameda, the engineer stresses how complicated his experience was. He invites more questions and promises more information about how these things work on the inside. He also hints that there might be a series that goes into more detail.