Nansen Analysis Sheds Light on FTX Crash: Unraveling the Ties with Alameda Research
Summary:
Blockchain analysts from Nansen have conducted an in-depth analysis of the events preceding the FTX crash, including the transfer of $4.1 billion in FTT tokens between FTX and Alameda Research. Evidence of suspicious transactions and relationships between the two firms, and their control of nearly 90% of FTT token supply, is highlighted. The report also suggests that the collapse of the Terra/LUNA stablecoin and the subsequent insolvency of 3 Arrows Capital led to liquidity issues for Alameda, ultimately resulting in a covert $4 billion loan from FTX.
Blockchain analytics specialists at Nansen explored the sequence of events leading to FTX's fall, particularly the exchange of $4.1 billion in FTT tokens between the cryptocurrency exchange and Alameda Research. The analysis by Nansen, shared with Cointelegraph, provides unique insights highlighting the close ties between the two ventures established by Sam Bankman-Fried. The former head of FTX is appearing in court to address numerous allegations concerning the breakdown of the FTX group. Rumors indicating that 40% of Alameda's $14.6 billion assets were in FTT tokens in September 2022, reportedly triggered FTX's downfall. Nansen's researchers found suspicious on-chain exchanges between FTX and Alameda before these rumors surfaced. From September 28 to November 1, Alameda transferred $4.1 billion in FTT tokens along with consistent transfers of mixed USD stablecoins amounting to $388 million to FTX. On-chain data shows approximately 280 million FTT (80% of the total 350 million FTT supply) were retained by FTX, with enormous amounts of FTT trading volumes moving between different FTX and Alameda wallets. According to Nansen, most of the FTT token supply, including company tokens and unsold non-company tokens, were tied up in a three-year vesting agreement with Alameda as its sole beneficiary. Given that the two firms controlled close to 90% of the FTT token supply, Nansen suggests they were capable of supporting each other's balance sheets. The report speculates that Alameda may have traded FTT tokens over-the-counter and as collateral with cryptocurrency lending firms based on on-chain transaction data. The Terra/LUNA stablecoin crash and the subsequent bankruptcy of 3 Arrows Capital (3AC) most likely resulted in Alameda facing liquidity issues due to the depreciation of FTT, which led to a covert $4 billion FTT-backed loan from FTX. Analysts believe the $4 billion transaction volume lines up with a $4 billion loan amount mentioned by some close acquaintances of Bankman-Fried in a Reuters interview. On-chain data also indicates Alameda would have been unable to honor its commitment to purchase FTT tokens from Binance at $22 on November 6, which came after Binance's CEO Changpeng 'CZ' Zhao stated he would sell his tokens due to negative reports about Alameda's financial status.
Published At
10/4/2023 1:57:25 PM
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