Alameda Research, the now-defunct cryptocurrency trading business, came dangerously close to bankruptcy in 2018, long before FTX came on the scene, according to new research investigating Sam Bankman-Fried and the exchanges that caused the failure.

A study published in The Wall Street Journal citing former workers indicated that Alameda suffered significant financial losses as a result of the trading algorithm it used. The program was developed to execute a high volume of transactions in a short period of time in an automated manner. The company was losing money due to its incorrect predictions about how prices would fluctuate.

The decline in the value of the XRP token in 2018 caused Alameda to lose approximately two-thirds of its assets, and the company was on the verge of going out of business. Reports indicate that Bankman-Fried managed to save the business venture by soliciting financial support from lenders and investors and assuring them profits of up to twenty percent on their investments.

Later, in the month of April 2019, FTX was introduced with the intention of providing a safe haven for institutional investors.

Bankman Fried leveraged Alameda as a growth engine with the introduction of FTX, when the trading business became the primary market maker for the exchange. This allowed Bankman Fried to continue its expansion.

Some people familiar with Alameda’s strategies say the exchange has on occasion taken the losing end of a trade to attract clients.

In an earlier statement, Bankman Fried said that Alameda and FTX have always operated separately. However, a new complaint filed by the United States Securities and Exchange Commission (SEC) indicates that this is not the case. During the course of the case, it was discovered that Bankman Fried had given instructions to develop a code in order to acquire an unfair advantage.

Regardless of the amount of collateral Alameda posted to the exchange, the code would allow the company to maintain a negative balance on the FTX. La Alameda has always been a ship doomed to sink from the outset.

However, Bankman Fried not only saved it in 2018 with borrowed money, but also later used it to build the now-defunct FTX cryptocurrency exchange and fuel its expansion. In 2018, Bankman Fried bailed him out with borrowed money.