Alameda’s False Promises: ‘High Risk-Free’ Returns

Rereading the story – When we go back in time with a new prism of reading, some events take on a different hue. Were the beautiful promises of the time sincere? Who knew what? And since when ? So many questions that will haunt the users and the partners screwed up for a while. Today we are going back to 2018the origins ofAlameda Researchwhen the first investors embarked on the adventure with guaranteed double-digit returns.

Alameda: high returns without risk for investors starting in 2018

In 2018, FTX does not exist yet and Alameda was created the previous year. At that time the young company of trading crypto is looking for investors and it broadcasts its announcements via Telegram to find some. The start-up specializes in quantitative trading and provides future partners with returns students without risks.

Thus, with a minimum of 15% per year of earnings and beautiful presentations, Alameda sets out to conquer the markets with a well-rehearsed speech in the hope of raising as many funds as possible:

“These loans have no downside, as we guarantee full payment of the loan principal and interest. (…) We are extremely confident that we will pay this amount. In the unlikely event that we lose more than 2% in any month, we will give all investors the opportunity to recall their funds. »

Against ETH or BTC, Alameda offered better than market returns – Source: Alameda Research

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Looking back, it was too good to be true

Furthermore, to complete convince the last undecided, the teams ofAlameda hold up charts showing annualized returns of 110% Between march and October 2018. With hindsight, this type of document should have appeared suspicious and could have triggered alarms according to some observers.

Tyler Gellasch is president of the Healthy Marketsfinancial market integrity association – but also a former member of the Congress and he worked for the DRY. A market expert, he regrets the turn of events:

Promises of high returns without any risk are a massive red flag for sophisticated investors and can only lead to criminal and civil investigations. The offering appears to be similar to an unregulated offering of a debt security. Historically, regulators and investors have viewed low-risk, high-return investment opportunities with great skepticism, especially in a low interest rate environment.»

He will conclude by explaining that all of these documents may be used by investigators to demonstrate the possible intentions malicious of the founders ofAlameda or at least their lightness in the investor warning. Obviously, tongues will now be loosened around this affair and will thus help the justice American and international to shed light on the unfolding of events.

To keep your cryptos, nothing beats a Ledger wallet. The Nano S and Nano X provide security and ease of use. Indeed, they are compatible with the vast majority of cryptos and networks. They are an absolutely essential alternative to all exchanges that offer to hold your assets for you. Remember, “Not your keys, not your coins” (commercial link)!

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