Alameda sent $4.1B FTT tokens to FTX before crash – Nansen report

Blockchain data analysts revisit the days before Nansen's FTX collapse, including the transfer of $4.1 billion worth of FTT tokens between the exchange and Alameda Research.

Nansen's report, shared with Cointelegraph, reveals specific observations from the blockchain analytics firm, which show the close relationship between the two companies founded by Sam Bankman-Fried. The former CEO of FTX has appeared in court for the first time to face multiple charges related to the collapse of the FTX Group.

The collapse of FTX was widely reported to be triggered by initial reports that Alameda had 40% of its $14.6 billion in assets held in FTT tokens by September 2022.

Nansen analysts confirmed that they had observed suspicious chain interactions between FTX and Alameda before these reports came to light. From September 28th to November 1st, Alameda sent $4.1 billion worth of FTT tokens to FTX, as well as a series of transfers totaling $388 million USD in stablecoins.

On-chain data indicates that FTX has captured about 280 million FTT (80%) of the total 350 million FTT supply. The blockchain data reflects the “notable” amount of FTT trade volume, estimated at billions of dollars, flowing between various FTX and Alameda wallets.

Nansen also highlights that most of the FTT token supply, which consists of company tokens and unsold non-company tokens, is locked into a three-year contract. The sole beneficiary of the contract is a wallet controlled by Alameda, analysts said.

Given that the two companies control about 90% of the FTT token supply, Nansen suggests that the institutions were able to stretch each other's balance sheets.

According to the report, Alameda sells FTT tokens over-the-counter as well as collateral for loans from cryptocurrency lending institutions.

“This theory is historically supported by on-chain data, where we have seen regular large inflows and outflows between the FTX, Alameda, and Genesis Trading wallets, as seen in December 2021, with a volume of up to $1.7 billion.”

Following the collapse of the Terra/LUNA algorithm stablecoin and the bankruptcy of 3 Arrows Capital (3AC), FTT's devaluation led to financial difficulties for Alameda, which resulted in a $4 billion FTT-backed loan from FTX.

“Information on our chain suggests this may be the case. Between the June 2022 3AC collapse, Alameda sent ~163m FTT to the FTX Wallet, which is ~$4b at the time.

The researchers revealed that the $4 billion transaction volume was linked to the $4 billion loan volume, according to Bankuman-Fried's close associates in an interview with Reuters.

Blockchain data also reflects that Alameda may not make good on its offer to buy FTT tokens from Binance for $22 on November 6. This comes after Binance CEO Changpeng ‘CZ' Zhao announced that the exchange would be delisting the tokens following the scandal. He reported on Alameda's balance sheet.

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