Situational Awareness fund losses trigger central bank inquiries into major trading firms

The Federal Reserve and the Bank of England are questioning major banks regarding their exposure to large trading firms following significant losses at the Situational Awareness fund and Jane Street. Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, reportedly lost 67% in July due to a downturn in AI and semiconductor stocks, forcing the liquidation of assets through Citadel Securities. Jane Street also reportedly faced monthly losses of approximately $15 billion. The SEC is concurrently investigating the use of leverage and credit arrangements between the fund and its creditor banks.