After FTX collapsed in early November, FTX and Alameda Research’s two top executives — Sam Bankman-Fried and Caroline Ellison — are on Wikipedia’s list of the top losing traders in the world. According to the wiki page, Bankman-Fried and Ellison’s so-called “trading losses”, his US$51 billion notional, top the list in terms of the highest amount of notional money lost through trading.
Wiki article prematurely suggests FTX debacle was $51 billion in “trading losses”, but investigation continues
The FTX debacle is a big deal, and according to data, it was the biggest loss in the financial world in quite some time. In fact, according to the Wikipedia page “List of Trading Losses“, FTX co-founder Sam Bankman-Fried (SBF) and Alameda Research CEO Caroline Ellison have written a list of trading losses. has been added to the top of Allegedly lost $51 billion. The so-called trading losses associated with SBF and Ellison surpassed the previous largest trading losses in 2021. Before the collapse of FTX, Archegos Capital Management reportedly lost $10 billion in total return swaps, which Archegos founder Bill Hwang reportedly lost. All in 2 days.
Less than FTX and Archegos trading losses were Morgan Stanley and his Howie Hubler, a bond trader, in 2008 with his $9 billion loss. Four years later, JPMorgan Chase and Bruno Iksil also lost $9 billion in credit default swaps. This year, Chinese firm Tsingshan Holding Group tried to short commodity nickel, and a bad bet cost him $8 billion. Under China’s Qingshan, Societe Generale and Jérôme Kerbier suffered his $6.12 billion loss in 2008. However, FTX’s losses far exceed the individually listed trading losses, with Wikipedia’s editors explaining that the list includes “both fraudulent and non-fraudulent losses.”
Interestingly, the Wikipedia editors elaborated that Bernie Madoff’s Ponzi money related to his scheme was not included. Madoff’s scheme ran into the $50 billion range, similar to FTX’s, but Wikipedia editors say, “Madoff didn’t lose most of this money on the deal.” These days, some people draw a lot of parallels between Bernie Madoff and his SBF. What’s interesting about the Wikipedia article is that the editor decided not to include the Madoff fall because it was a Ponzi scheme, but the FTX debacle is included in the list. This is despite the fact that the FTX investigation is still ongoing and the case has not been resolved in court.
Did FTX lose his $51 billion in a really bad deal?
There are numerous sources claiming that FTX and Alameda executives were “inexperienced and unsophisticated individuals,” and Alameda Research CEO Caroline Ellison may have been a fearsome margin trader. There are also other reports that show that Additionally, speculation abounds that FTX and Alameda’s operation was her Ponzi-like system. Alameda did not actually trade cryptocurrencies,but rather “invested $8 billion in 448 venture-stage startups, most of which had ‘1 to 10’ employees. There are people out there and it’s not documented.” Further, ,according to Yves Smith of nakedcapitalism.com, no one in the media asked what happened to his $3.3 billion that Alameda allegedly lent to his SBF. Loans allegedly made by Alameda Research totaled $4.1 billion, mostly going to his SBF, data revealed in a report published by the Financial Times (FT).
The FT reported that SBF acquired his $1 billion personal loan, with $2.3 billion going into his SBF entity called Paper Bird. Mark Karpelès, former CEO of Mt Gox, created theFTX entity list. This makes Paper Bird one of the top companies under his SBF umbrella. So far, nakedcapitalism.com’s Smith says he hasn’t been asked by reporters who interviewed SBF where the $3.3 billion went. Additionally, SBF did not explain in the interview why he was given “substantial personal lines of credit” to top FTX and Alameda executives. Instead, the SBF describes a bizarre margin trading process, andreported that top executives or “certain accounts” were required to participate in FTX’s odd margin trading system. There was no need to borrow or provide collateral.
Wikipedia’s decision to include FTX’s alleged “trading error” in its top trading loss list due to an ongoing investigation and the court’s just beginning to get involved in his FTX debacle. It is quite possible that the judgment is wrong. Wikipedia editors may have to reclassify the FTX case in the same way it was applied to his $50 billion debacle of Madoff. The point is, at this point, the FTX and Alameda debacles were in fact justifiable ‘trading losses’, or that most of his $51 billion, as quoted in the Wikipedia article, was lost on trading mistakes. It’s just that there isn’t enough evidence.
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