SBF released an article explaining the cause of the Alameda implosion. He states that three things combined to cause the implosion.
1.Over the course of 2021, Alameda’s balance sheet grew to roughly $100 billion of Net Asset Value, $8 billion of net borrowing (leverage), and $7 billion of liquidity on hand.
2.Alameda failed to sufficiently hedge its market exposure. Over the course of 2022, a series of large broad market crashes came (in stocks and in crypto) leading to about 80% decrease in the market value of its assets.
3.In November 2022, an extreme, quick, targeted crash precipitated by the Binance CEO CZ, made Alameda insolvent.
And then Alameda’s contagion spread to FTX and other places, ultimately impacted Voyager, Genesis, Celsius, BlockFi, Gemini, and others.