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

<p>A substantial amount of $4.1 billion worth of FTT tokens was
moved between FTX and Alameda Research before the cryptocurrency exchange
collapsed. As former FTX's CEO Sam Bankman-Fried faces a series of charges linked
to the exchange's downfall, a recent report by Nansen has revealed questionable
transactions involving FTX and its hedge fund, Alameda Research. </p><p>It all began with the discovery that Alameda held a
significant share of 40% of its assets, worth $14.6 billion in the form of FTT
tokens, in September 2022. But Nansen's analysts had their suspicions even
before these reports surfaced. Between September 28 and November 1, $4.1 billion worth of
FTT tokens were transferred from Alameda to FTX, along with a number of
significant transfers of United States dollar-pegged stablecoins, totaling $388
million, Cointelegraph reported.</p><p>FTX's Control of FTT Tokens </p><p>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 <a href="https://www.financemagnates.com/tag/ftx/" target="_blank" rel="follow">FTX</a> and <a href="https://www.financemagnates.com/tag/alameda-research/" target="_blank" rel="follow">Alameda</a>. This led to speculation about the nature of
their relationship and the extent of their influence over the supply of FTT
tokens.</p><p>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.</p><p>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.</p><p>Alameda's Financial Challenges </p><p>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 <a href="https://www.financemagnates.com/search-results/?searchPhrase=Binance" target="_blank" rel="follow">Binance</a>'s CEO Changpeng Zhao to sell FTT
tokens.</p><p>As of June 30, Alameda Research had a 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."</p><p>On the flip side, the liabilities of the trading firm
consisted of loans, accounting for a staggering 92.5% of its $8 billion in
liabilities, equivalent to $7.4 billion in loans. Of this liability, $292
million was tied up in "locked FTT".</p>

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