FTX and Alameda’s Secret Dealings: $4.1B in FTT Tokens Transferred before Bankruptcy

FTX and Alameda’s Secret Dealings: $4.1B in FTT Tokens Transferred before Bankruptcy

A significant sum of $4.1 billion in FTT tokens was
transferred between FTX and Alameda Research before the crypto exchange
collapsed. As former FTX CEO Sam Bankman-Fried faces charges connected to the
exchange’s downfall, a recent report has brought to light suspicious transactions
involving FTX and its hedge fund, Alameda Research.

It started when it was revealed that Alameda had a
substantial share of 40%, valued at $14.6 billion in FTT tokens, in September
2022. However, a report by analytics firm Nansen, as cited by Cointelegraph,
reveals that between September 28 and November 1, there were transfers of $4.1
billion worth of FTT tokens from Alameda to FTX, in addition to several notable
transfers of USD-pegged stablecoins amounting to $388 million.

FTX’s Control of FTT Tokens

FTX held around 280 million FTT tokens, which was estimated
to be 80% of the total FTT supply of 350 million. Additionally, billions of
dollars worth of FTT tokens were continuously moved between various wallets
controlled by FTX and Alameda. This led to speculation about the nature of
their relationship and the extent of their influence over the supply of FTT
tokens.

Nansen’s report further points out that a substantial
portion of FTT tokens, comprising company tokens and unsold non-company tokens,
was locked in a three-year vesting contract. Markedly, the sole beneficiary of
this contract was a wallet controlled by Alameda. With both companies having
control of the FTT token supply, it’s clear they had the ability to help each
other financially.

Following the collapse of Terra LUNA and the bankruptcy of Three Arrows
Capital (3AC), Alameda found itself in a liquidity crisis due to a
drop in the value of FTT. Nansen’s on-chain data revealed that approximately 163
million FTT tokens, valued at around $4 billion at the time, were transferred
from Alameda to wallets during the collapse of 3AC in June last year.

Alameda’s Financial Challenges

The report also noted that Alameda would have faced
difficulties in accepting an offer to buy FTT tokens from Binance at $22 on
November 6. This situation came about because of unfavorable reports about
Alameda’s financial condition, prompting Binance’s CEO Changpeng Zhao to sell FTT
tokens.

As of June 30, Alameda Research had total assets worth approximately
$14.6 billion, with a significant portion, amounting to 25% or $3.66 million,
represented by „unlocked FTT tokens.” Furthermore, a review of the document by Coindesk uncovered that 15% or $2.16 billion of Alameda Research’s
assets were held as „FTT collateral”.

On the flip side, the liabilities of the trading firm
consisted of loans, accounting for a staggering 92% of its $8 billion in
liabilities, equivalent to $7.4 billion in loans. Of this liability, $292
million was tied up in „locked FTT”.

This article was written by Jared Kirui at www.financemagnates.com.

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