Before a cadre of Jane Street Group alumni spectacularly scorched the cryptocurrency landscape from their perch at FTX this month, the Wall Street firm was enjoying its status as the behemoth almost nobody knew about.

The more-than 2,000 employee powerhouse based in lower Manhattan is known among peers for its obsession with risk and preference for stealth. It digs into the health of trading partners, models potential catastrophes, autopsies losses and restricts staff from commenting publicly, because even that poses a danger.

The easiest way to describe the culture that Sam Bankman-Fried created at FTX: The opposite.

As the story unspools of the epic collapse of FTX, the $32 billion crypto exchange now in bankruptcy, one of the biggest revelations is that founder and former leader Bankman-Fried recruited an inner circle from some of the most serious employers around Wall Street and Silicon Valley and built such a haphazard operation.

Fellow Jane Street defectors included his one-time romantic partner Caroline Ellison, who ran the Alameda Research investment arm, and Brett Harrison, who oversaw FTX US. Sam Trabucco, who co-led Alameda for a time with Ellison before announcing his departure in August, was a trader at Susquehanna International Group. Technology head Gary Wang and engineering chief Nishad Singh hailed from Google and Facebook, respectively. FTX’s chief operating officer, Constance Wang, previously worked at Credit Suisse Group AG.

Jane Street should have been an ideal training ground. On Wall Street, the proprietary trading shop is considered a premier employer of quants and techies, priding itself on catching big, complex risks that the rest of the market misses. It’s been trading crypto for half a decade.

Despite such pedigrees, a growing pile of evidence -- now laid out in bankruptcy court -- shows key parts of FTX lacked adequate risk controls and bookkeeping. Secret financial ties and privileges for Alameda alarmed investors and employees alike. FTX is now the subject of a criminal probe. And a tally of its assets shows a “substantial amount” is either missing or stolen, a lawyer for firm told the bankruptcy court Tuesday. That case involves more than a million creditors.

“When billions of dollars are changing hands, this isn’t a child’s game of Monopoly,” said Ty Gellasch, CEO of the Healthy Markets Association, an advocacy group. “You have to have record keeping that looks better than a high school kid’s lemonade stand.”

An FTX representative didn’t respond to a message seeking comment, and a spokesman for Jane Street declined to comment.

When Vox messaged Bankman-Fried last week to ask where the trouble began, he blamed “messy accounting” and said he “didn’t realize the full size of it until a few weeks ago.”

“I didn’t mean for any of this to happen,” he wrote in a letter to employees Tuesday. “And I would give anything to be able to go back and do things over again.”

Doomsday Trade
Bankman-Fried spent three years at Jane Street, and there’s no black mark -- or what’s known in the industry as a “disclosure event” -- in his sparse employment records with brokerage regulators.

The firm starts indoctrinating new traders into its mania with risk the moment they arrive, according to people with knowledge of its practices. Its leaders allocate an unusually thick slice of capital to hedging and even maintain a doomsday trade in case the US stock market craters.

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