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Alameda Gap

In the aftermath of the collapse of Alameda Research, a significant drop in liquidity plagued global exchanges. This decline was primarily caused by the substantial losses incurred by market makers associated with the collapse. The individual behind this collapse, Sam Bankman-Fried, allegedly siphoned billions of dollars in customer funds from FTX, a prominent cryptocurrency exchange.

This egregious situation came to a head when action was taken against Bankman-Fried. On December 12, 2022, Sam Bankman-Fried was apprehended by the Bahamian police. Subsequently, he was extradited to the United States, where he is expected to face legal consequences for his alleged actions.

Amidst these developments, the digital asset market continues to grapple with the enduring impact of the liquidity crisis, now famously dubbed the “Alameda Gap” by blockchain-data firm Kaiko. The aftermath of these events serves as a stark reminder of the challenges and vulnerabilities within the cryptocurrency industry.