- Sam Bankman-Fried testified that he began investing in Solana’s SOL token in 2020, buying it for around 20 cents each using profits from his firm Alameda Research.
- Bankman-Fried founded the cryptocurrency exchange FTX in 2019 and the trading firm Alameda Research that same year, amassing a $26 billion personal fortune by 2022.
- FTX collapsed in November 2022 amid liquidity issues and questions about Alameda Research’s use of customer funds, leading to bankruptcy and criminal charges against Bankman-Fried.
Sam Bankman-Fried started investing big in Solana back in 2020, buying up tokens for just 20 cents each and funding the purchases with profits from his trading firm Alameda Research. That’s according to testimony he gave on October 27, 2023 at his trial on fraud and conspiracy charges.
Background on Sam Bankman-Fried
Sam Bankman-Fried founded the cryptocurrency exchange FTX in 2019. He also founded the trading firm Alameda Research that same year. By 2022, FTX had grown to be the second largest cryptocurrency exchange in the world, with Bankman-Fried amassing a personal fortune of over $26 billion.
Early Solana Investments Funded by Alameda Profits
During his trial testimony on October 27, 2023, Bankman-Fried stated that he started buying up Solana’s SOL token in 2020 when it was trading for around 20 cents. He claimed the funds for these purchases came from “Alameda’s operating profits” as well as loans from third parties.
Solana is a blockchain platform that competes with Ethereum. Bankman-Fried’s early investments in SOL ended up being very profitable, with the token surging to over $260 by November 2021. However, his trading firm Alameda Research collapsed in 2022 amidst the FTX implosion.
The Downfall of FTX and Bankman-Fried
FTX, Alameda Research and Bankman-Fried himself have all seen a stunning downfall over the past year. FTX filed for bankruptcy in November 2022 after experiencing a liquidity crunch. Questions emerged about how Alameda Research was using FTX customer funds. Bankman-Fried resigned as FTX CEO and now faces criminal charges related to the alleged mishandling of billions in customer deposits.
The saga continues to unfold, with Bankman-Fried’s trial testimony providing insights into his early cryptocurrency investments like Solana. However, big questions remain about exactly what happened behind the scenes at FTX and Alameda that led to their catastrophic collapse.