Business Maverick: Alameda Bet Big on Crypto Miner Genesis Before Sector Implosion

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One of the bigger questions surrounding the collapse of Sam Bankman-Fried’s crypto empire is what venture investments his trading firm Alameda Research poured billions of dollars in.

In the most recent crypto boom, miners were able to raise billions of dollars from the equity market and lenders at generous terms, often using the equipment purchased as collateral on loans. In the first half of this year, the Bitcoin mining industry saw as much as 90% profit margins.

But the mining industry quickly went from one of the most lucrative corners in the digital world to one of the most distressed sectors, given the plunge in Bitcoin, soaring energy costs and more competition among miners. Some of the largest mining companies are on the verge of bankruptcy with a key mining revenue gauge falling to a record low.opening

its first facility in Iceland in 2014. It had large-scale mining operations in China before the government imposed a sweeping ban on crypto mining last May. Marco Streng, the founder, later started Genesis Digital Assets in April 2021 as he shifted focus to self-mining Bitcoin rather than being a crypto-service provider, according to his“We’re going big,” Streng said in the LinkedIn post in June 2021, about two months before Alameda made its first investment to the company.

Now miners are shuttering facilities as the crypto downturn grows longer. And billions of dollars of other FTX and Alameda assets remain unaccounted for.

 

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