Uncovering SBF's "Circle of Friends"

This article is an original piece by Chain Catcher, authored by Gong Quanyu.

SBF (Sam Bankman-Fried) has become one of the most well-known market manipulators in the crypto market. Under his leadership, the FTX exchange and related tokens such as FTT, SOL, and SRM have shown aggressive performance in the crypto market, and his strategic layout and trading methods have also become a focal point in the market.

As a result, Chain Catcher will launch a series of articles to conduct an in-depth investigation into SBF and his FTX and Alameda Research, attempting to uncover the secrets behind the rapid rise of the SBF faction. This article focuses on SBF's "circle of friends," reviewing the investment institutions and exchanges that have deep cooperative relationships with the SBF faction.

Recently, another SBF-related token is about to be listed on exchanges, namely the well-known map application Maps.me token MAPS. This project has also raised $50 million in seed funding, making it the highest-funded project in the recent crypto market.

However, according to media reports, Maps.me was sold by Russian internet giant Mail.ru to Parity.com for $20 million in November 2020. Now, just two months later, Maps.me has secured $50 million in funding after presenting a DeFi story, and its rapid valuation growth is astonishing, reflecting SBF's high hopes for this project.

Interestingly, the project investors Genesis Block Venture (often reported as Genesis Capital, but officially named this), CMS Holdings, and Sino Global Capital have frequently appeared in investment reports related to Alameda Research, especially in reports concerning SBF-related tokens.

Upon further investigation, more frequently mentioned names such as Three Arrows Capital, Multicoin Capital, and NGC Capital can also be found, all of which have co-invested with Alameda Research in at least four projects, including the following investments:

• At the end of June 2020, the decentralized exchange Serum, led by SBF, announced the completion of a private funding round, with participating institutions including Genesis Block, CMS Holdings, and Sino Global Capital.

• In August 2020, the decentralized derivatives trading protocol Perpetual Protocol completed a $1.8 million funding round, led by Multicoin Capital, with participation from Three Arrows Capital, CMS Holdings, and Alameda Research.

• In September 2020, the synthetic asset protocol Linear Finance raised $1.8 million in private funding, led by Alameda Research, CMS Holdings, Genesis Block, NGC Ventures, and others.

• In October 2020, the project Persistence, which uses NFTs to bridge traditional finance and DeFi, announced the completion of a $3.7 million private funding round, with participation from Genesis Block, NGC Ventures, Alameda Research, and others.

• In November 2020, the decentralized derivatives protocol Opium announced the completion of a $3.25 million funding round, with participation from Alameda Research, CMS Holdings, and others.

• In December 2020, the decentralized exchange Bonfida, led by SBF, announced it had raised $4.5 million in seed funding, with CMS Holdings leading the round and participation from Sino Global Capital, Three Arrows Capital, Genesis Block Venture, and others.

It can be said that in addition to some conventional cooperative investment institutions, SBF now involves Genesis Block Venture, CMS Holdings, and Sino Global Capital in important project investments, forming a relatively closed circle of interests for better project management in the future.

Sam Bankman-Fried

Therefore, Chain Catcher has conducted a comprehensive review of institutions that frequently co-invest with the SBF faction based on public reports and investigated the relationships of those institutions that have relatively deep ties with the SBF faction, discovering deeper binding interests behind them.

1. Genesis Block

Genesis Block was established in 2017 and primarily operates cryptocurrency OTC trading in Hong Kong, while also owning one of Asia's largest cryptocurrency ATM operators, CoinHere. According to official information, the company received millions of dollars in investment from Alameda Research in 2020.

In July 2020, Genesis Block announced on its official website that it had reached cooperation with three major SBF projects: Serum, FTX exchange, and Alameda Research. The cooperation included: Genesis Block becoming a staking node for Serum; over 40 ATMs located in Hong Kong and Taiwan supporting the FTX exchange token FTT; and Alameda Research providing core technology for Genesis Block's new OTC portal and RFQ system to enhance customer experience in cryptocurrency trading.

Through these collaborations and investments, Genesis Block has formed a deep binding relationship with Alameda Research, and in the following months, they jointly invested in the projects Linear Finance and Persistence.

Entering December, Genesis Block launched Genesis Block Ventures (GBV) to further strengthen its layout in cryptocurrency investment. Its first move was to announce the acquisition of the Ethereum Layer 2 scaling solution OMG Network (OMG) and quickly added liquidity of 6,000 ETH to the OMG token in Uniswap and Sushiswap pools, attracting significant industry attention.

Subsequently, GBV actively participated in investments in SBF-related projects such as Bonfida and Maps.me, while also frequently investing in crypto startups, publicly investing in nearly 10 projects including MahaDAO, DAO Maker, Exeedme, Poolz, SuperFarm, Paralink, Lepricon, and DAOventures in the past month.

2. CMS Holdings

CMS Holdings was established in December 2019 by Daniel Matuszewski, the former head of Circle Trade, along with other partners including Bobby Cho, the former trading director of Paxos, and Julien Collard-Seguin, the former technical director of Circle.

According to information, Ryan Salame, the head of Alameda Research's OTC business, also served as the head of Circle's OTC operations in Hong Kong and left Circle in June 2019, likely familiar with CMS Holdings founder Daniel Matuszewski.

In July 2020, CMS Holdings participated in the private funding round of the decentralized exchange Serum initiated by SBF, and since then has frequently co-invested in projects including Perpetual Protocol, UpBots, Linear Finance, Opium Protocol, Bonfida, and Maps.me.

In September 2020, after SBF gained control of the Sushiswap project and initiated a multi-signature governance vote, CMS Holdings participated in the election and became one of the nine multi-signature governors, indicating CMS Holdings' support for SBF.

3. Sino Global Capital

Sino Global Capital is a Beijing-based crypto investment and consulting firm aimed at bridging the gap between the Chinese and international markets. Founder Matthew Graham has been active in the Chinese market for many years and has a Chinese name, 马修.

In March 2020, the Liquid Value blockchain fund under Sino Global Capital announced it was investing in FTX's Series B financing, and the two parties have maintained a close cooperative relationship since then. Although the number of public investments has been very low over the past year, they have participated in investments in SBF-led projects such as Serum, Bonfida, and Maps.me, and recently stated they would quickly release an investment report on Maps.me to support the project.

In September 2020, after SBF gained control of the Sushiswap project and initiated a multi-signature governance vote, Matthew Graham also participated in the election and became one of the nine multi-signature governors, expressing his support for SBF in several interviews.

4. BitMax

BitMax is an exchange established in 2018 with domestic background, and a long-term cooperative relationship was established with FTX from the beginning, possibly related to FBG Capital and one of its executives. Public information shows that BitMax and FTX's early investors included FBG Capital, and Shane Molidor, the former business development director of FBG Capital, began serving as BitMax's global business director in May 2019.

At the end of July 2019, BitMax became one of the first exchanges globally to list FTT with FTX's support, and Alameda Research gradually became one of BitMax's largest quantitative trading institutions.

In October 2019, BitMax announced a strategic cooperation with FTX and Alameda Research, with FTX listing BitMax's platform token BTMX, and BitMax listing leveraged tokens for BTC, XRP, and other coins issued by FTX. From SBF's statements in the press release, it can be seen that he primarily valued BitMax's infrastructure and connectivity to complement Alameda's complex trading system while increasing the liquidity and trading efficiency of its leveraged token products.

Subsequently, most tokens issued under SBF's leadership would choose to conduct pre-sales and initial listings in collaboration with BitMax, such as the tokens for Serum, Bonfida, and Maps.me, which not only brought considerable traffic to BitMax but also created a stronger influence for SBF-related tokens.

5. Race Capital (formerly Proof Of Capital)

Race Capital is a crypto venture capital fund established in April 2019 with a scale of $50 million, headquartered in San Francisco, USA. The three co-founders are Phil Chen, former blockchain lead at HTC, Edith Yeung, former partner at 500 Startups, and Chris McCann, co-founder of StartupDigest, with HTC also being an LP of the fund.

Although Race Capital has not had many direct collaborations with the SBF faction (such as launching the FTX customized HTC phone), it is likely one of the important reasons SBF chose to build his decentralized ecosystem on the Solana blockchain.

According to descriptions from several partners of the firm on LinkedIn, Chris McCann was the first seed round investor in Solana and helped the project enter the 500 Startups accelerator program, where partner Edith Yeung also decided to invest in the project, with both parties and other investors collectively investing millions of dollars in Solana in March 2018.

Perhaps due to the opportunities brought by this investment, Chris McCann and Edith Yeung co-founded Race Capital a year later. In August 2019, FTX announced it had received $8 million in seed funding from Proof Of Capital and other institutions, thus forming a close binding relationship.

In June 2020, SBF announced the development of the decentralized exchange Serum on the Solana blockchain, where the high performance of the blockchain may be a dominant factor, but the matchmaking and recommendations from investors behind it may also be one of the reasons.

6. Three Arrows Capital

Three Arrows Capital is a hedge fund based in Singapore that has long engaged in hedging trades in the cryptocurrency secondary market while investing in crypto startups. Due to the nature of its business, Three Arrows Capital has long traded on the FTX exchange and ranks among the top 10 in its trading volume leaderboard.

In the past six months, Three Arrows Capital has co-invested with Alameda Research in at least four projects, including mStable, Perpetual Protocol, DODO, and Bonfida.

7. NGC Capital

NGC Capital is a crypto venture capital firm established in 2017 and headquartered in Shanghai. Since August 2020, NGC Capital has frequently co-invested with Alameda Research, targeting at least seven projects.

8. Multicoin Capital

Multicoin Capital is an overseas crypto venture capital firm established in 2017, which has co-invested with Alameda Research in at least four projects in the past six months, including Zapper, Perpetual Protocol, Dune Analytics, and Serum.

At the same time, Multicoin Capital is also an early investor in the Solana blockchain, having led its $20 million financing in July 2019. Therefore, after SBF chose to develop Serum on this blockchain, they also strongly supported the project, with several partners publicly voicing their support on Twitter.

Through collaborations with these various institutions, along with his impressive market operation and layout capabilities, SBF seems to have established a large and stable community of interests and ecosystem around the FTX exchange. His assembly-line operations in the crypto market are formidable and aggressive, but the long-term value this phenomenon brings to the entire industry remains questionable.

When a very small number of people have the power to manipulate the market, even if their current subjective intentions are neutral, this power is bound to go out of control under the lack of regulation and human nature, causing destructive impacts on the healthy development of the crypto market.