REEF updates

Alameda Research
3 min readMar 15, 2021

a) this is copied over from a conversation between the Alameda and REEF teams; apologies for any typos or errors!
b) these are all verbatim excerpts from the conversation; we believe this accurately represents what happened.
c) these are all written in chronological order
d) this is in response to a blog post by REEF finance which made significantly misleading statements

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Notes, 8am SGT
a) It’s worth noting that, in the crypto OTC space, handshake deals like the one described here are commonplace. We’ve done many OTC trades of this sort of size before, agreed upon in exactly this way, and had no problems before this.
b) We provided quotes here of all the relevant parts of our conversation with REEF — a screenshot has circulated of the REEF CEO making claims after the trade about the terms of the trade, it’s worth explicitly noting he was misrepresenting the terms he himself had agreed upon, as lain out in our post’s direct quotes.
c) It’s worth explicitly responding to this claim from REEF’s article: “Alameda conveyed an interest in investing an additional $60 Million in Reef Finance alongside this time frame.” This is not true, as can be taken from the quotes we posted — the $20m tranche represented a settlement and not the culmination of a $20m trade, and the additional $60m was agreed upon from the get-go, just not yet settled. Settlement in pieces is also commonplace in crypto — we’ve done it before and run into no issues.

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Given Reef’s response, we’d like to clarify our view of events.

  1. Reef states that we initially invested $20m and additionally conveyed interest in investing another $60m. This is not true; we initially agreed to an $80m trade and locked in the price for the entire size. After settling the first tranche, Reef reneged and refused to settle the following tranches.
  2. Clearly there were some differing expectations around the trade in terms of PR, etc; we apologize for any miscommunications on our part that may have contributed to that. However, we feel that the trade was agreed on unambiguously and that backing out after the fact is an act of bad faith on the part of Reef.
  3. Although it is not relevant for the terms of the deal, it is not true that Alameda immediately sold all of the REEF.

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In On March 8th 2021, Alameda and REEF agreed to an OTC transaction:

Alameda: “…for $80M we would buy 2,702,702,703 tokens. Does that work for you?”

Reef: “2,702,702,703

Alameda: “those are the numbers I’m getting”

Reef: “yeah, same here”

Alameda: “ok sounds good!
pls confirm? maybe we can settle say 1/4 of it tonight? so we send $20M (does USDC work?) for 675,675,676 REEF?”

Reef: “675.675.675”

— —

Reef: “I assume it is fine with announcing you guys as a big investor, right?”

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March 10th:

Alameda: “…just looing to settle
what we did”

Reef: “We can do another 20 after the announcement.”

Alameda: “whens announcement?”

Alameda_2: “tentatively Friday 10pm HKT”

Reef: “Can also do earlier
Tomorrow is fine”

Alameda: “i guess the annoucement should match with the delivered size”

Reef: “We can, but not necessarily the full amount (maybe 40/80) so they are aware that more is coming?”

Reef: “okay so we can settle another 20m either tomorrow or friday — right after the announcement?”

Alameda: “ok”

— -

[The announcement comes out]

March 12th:

Alameda: “lets do another settlement today?”

Alameda: “let us know when you are available!”

March 13th:

Reef: “Discussing with the team, some resistance due to the no lockup

Alameda: “Ok though trades been agreed upon. Understand how that could have been a concern but not at this stage”

March 15th:

Alameda: “any update on your end?”

Reef: “Hi, here is our proposal: we can either add vesting or just call it at 20m$ without escalating this publicly since its as damaging for your brand as it is for reef.”

Alameda: “1. This is absolutely unacceptable. You broke a binding contract. That is both not legal and not something a partner would ever do.
2. We will obviously never work with you again.
3. We would be OK adding on 3 month linear vesting to the remainder, but only if we get custody of all up front; we obviously don’t trust you to deliver.
4. If you don’t agree to honor the deal or the above version in the next 3 hours, we’ll proceed with the cleanup and diligence we owe to the community.
5. We have no appetite for you continuing to negotiate ways to violate the deal…”

Reef: “1. Where is the contract?
2. Okay
3. Definitely not.
4. Okay.
5. Okay, neither do we.”