Blockchain Data Analysts Reveal Dubious Transactions Between FTX and Alameda
Nansen, a blockchain data analytics firm, has investigated the events leading up to the collapse of FTX and uncovered suspicious transactions involving $4.1 billion worth of FTT tokens between FTX and Alameda Research. It is widely believed that the collapse of FTX was triggered by reports highlighting that 40% of Alameda’s $14.6 billion in assets were held in FTT tokens.
Nansen analysts discovered on-chain interactions between FTX and Alameda before these reports surfaced. Between September 28 and November 1, Alameda sent $4.1 billion worth of FTT tokens to FTX, along with multiple transfers of USD-pegged stablecoins totaling $388 million.
According to blockchain data, FTX held approximately 280 million FTT tokens (80% of the total supply). Considerable amounts of FTT trading volume, amounting to billions of dollars, were observed flowing between various FTX and Alameda wallets.
The majority of the FTT token supply, including company tokens and unsold non-company tokens, was locked in a three-year vesting contract controlled by an Alameda-controlled wallet.
Nansen suggests that FTX and Alameda were able to support each other’s balance sheets due to their control over around 90% of the FTT token supply. The report also indicates that Alameda likely sold FTT tokens over-the-counter and used them as collateral for loans from cryptocurrency lending firms.
FTT-backed Loan from FTX Amidst Terra Ecosystem Collapse
The collapse of the Terra ecosystem and the subsequent bankruptcy of Three Arrows Capital (3AC) caused liquidity issues for Alameda due to the decline in the value of FTT. As a result, Alameda obtained a covert $4 billion FTT-backed loan from FTX.
Nansen’s on-chain data suggests that this loan coincided with a $4 billion transaction volume, which aligns with the loan figure disclosed by close associates of FTX CEO Bankman-Fried in an interview with Reuters.
Failed Offer to Buy FTT Tokens from Binance
Blockchain data also reveals that Alameda was unable to fulfill an offer to purchase FTT tokens from Binance at $22 on November 6. This occurred after Binance CEO Changpeng Zhao announced the exchange’s intention to sell its tokens following negative reports about Alameda’s balance sheet.
Hot Take: Analysis of Dubious Transactions and Liquidity Issues
The investigation conducted by Nansen sheds light on the dubious transactions between FTX and Alameda that preceded the collapse of FTX. The significant movement of FTT tokens and stablecoins raises concerns about the integrity of these transactions.
Furthermore, the liquidity issues faced by Alameda following the collapse of the Terra ecosystem and 3AC bankruptcy highlight the vulnerability of cryptocurrency exchanges and their reliance on stablecoin assets. It serves as a reminder of the importance of transparency, risk management, and regulatory oversight in the crypto industry.
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