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Alameda Research and Genesis’ multi-billion dollar relationship reportedly began years ago with Sam Bankman-Fried asleep in a beanbag chair at their first meeting

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sam bankman fried courtFormer FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, leaves following a hearing at Manhattan federal court in New York City, U.S. January 3, 2023.

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  • Alameda Research and Genesis reportedly kicked off their relationship at a meeting in 2018.
  • Genesis doled out hundreds of millions of dollars in unsecured loans to Alameda, the Wall Street Journal reported.
  • At the peak, Alameda had $6.5 billion from Genesis through loans that were only 50% secured, sources told the WSJ. 

Sam Bankman-Fried’s crypto trading firm Alameda Research met with lender Genesis Global Capital in 2018, kicking off a years-long, multi-billion dollar lending relationship between the two embattled firms, the Wall Street Journal reported on Thursday.

When Genesis’ team, including former chief exec Michael Moro, arrived to the Berkeley, California office where Alameda had been working, Bankman-Fried was reportedly found asleep on a beanbag chair. The former crypto billionaire was “surprised they showed up” since the fund, which was capturing bitcoin arbitrage opportunities, was still very small in late 2018.

The two parties didn’t ink a deal that day because Genesis saw Bankman-Fried’s nap as “a sign of [his] dedication to his company,” the report reads, citing people familiar. Moro denies attending this meeting. 

At the time, Alameda was on its way to making more capital-intensive crypto bets. This led to a deepening lending relationship between the two firms over the years.

Genesis doled out hundreds of millions of dollars in unsecured loans to Alameda. At the peak, the trading firm reportedly had $6.5 billion from Genesis through loans that were often only 50% secured. 

Alameda has since been accused of using customer deposits from Bankman-Fried’s crypto exchange FTX for daily operations like making risky investments. As a result, Bankman-Fried is charged in an eight-count indictment with money laundering, fraud, and campaign finance violations. The disgraced founder has pleaded not guilty.

Meanwhile, Genesis is reportedly making bankruptcy plans after taking hits from exposure to defunct crypto hedge fund Three Arrows Capital and FTX.

Digital Currency Group, the parent company of Genesis, did not immediately respond to Insider’s request for comment. 

Read the original article on Business Insider
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