Key Takeaways
- On 2 Nov, CoinDesk revealed a bit revealing that ~40% of Alameda’s $14.6bn property on their stability sheet have been held in FTT.
- Though FTX and Alameda had been portrayed as two impartial organizations, early on-chain knowledge from Could 2019 counsel that the delineation might not have been clear from the beginning. Our knowledge confirmed that aside from different CEX addresses, Alameda was the one clearly identifiable counterparty previous to the debut of FTX.
- Alameda had acquired 5m FTT tokens from the FTX deployer contract two days previous to the FTX itemizing of FTT (on 29 Jul 2019). One week later, ~5m FTT tokens have been coincidentally transferred again to the identical FTX deployer contract.
- Based mostly on our knowledge and analysis, ~280m of the 350m FTT provide (~80%) was discovered to be held by FTX alone, with a substantial proportion of FTT quantity (FTT transactions amounting to billions) flowing between numerous FTX and Alameda wallets. Nearly all of the token provide, consisting of firm tokens and a few unsold non-company tokens, had additionally been locked in a 3 yr vesting contract whose sole beneficiary was an Alameda-controlled pockets. This begs the query: Why was an Alameda pockets the only beneficiary of the FTT 3 yr vesting contract that was supposedly meant for FTX?
- Provided that each Alameda and FTX had managed the vast majority of the FTT tokens (~90%), the low circulating provide meant that FTT costs and, thus, the stability sheets of each entities might have been simply “propped-up”. This acted as a double-edged sword, because the demise of Alameda/FTX might even have an opposed impression on each other.
- Given FTT’s low market float, Alameda had restricted choices of searching for liquidity for the FTT tokens on its stability sheet. They more than likely bought FTT tokens OTC, and/or used its FTT as collateral for loans from lenders. This idea is backed by historic on-chain knowledge the place we noticed common massive inflows and outflows between FTX, Alameda and Genesis Trading wallets with switch volumes up to $1.7b as seen in Dec 2021.
- With the fallout of Terra and 3AC in Could/June, it’s doubtless that Alameda skilled liquidity points because of the declining price of FTT, which was doubtless utilized as mortgage collateral. Did Alameda obtain an FTT-backed mortgage from FTX? Our on-chain knowledge signifies that this will have occurred. Amidst the collapse of 3AC in mid-June 2022, Alameda despatched ~163m of FTT to FTX wallets, value ~$4b at the moment. The $4b transaction quantity apparently coincides with the $4b mortgage determine from FTX to Alameda that was revealed within the Reuters interview.
- Previous to the publication of CoinDesk’s report, we noticed a lot of uncommon transactions between FTX and Alameda throughout Sep 28 and Nov 1. These included a $4.1b switch of FTT tokens from Alameda to FTX and a number of other steady transfers of stablecoins amounting to a complete of $388m USD into Alameda’s wallets from totally different sources.
- Lastly, our on-chain knowledge additionally revealed that Alameda was unlikely to have the mandatory firepower (primarily based on recognized wallets on-chain)to buy the whole lot of Binance’s FTT holdings ($584m value at the moment) .
Introduction
It began with CoinDesk reporting that “There are more FTX tokens among its $8 billion of liabilities: $292 million of “locked FTT.” (The liabilities are dominated by $7.4 billion of loans.).” Subsequent, Alameda Analysis’s CEO, Caroline Ellison, supplied to purchase up Binance’s FTX Tokens (FTT) at $22 per token. What adopted was undoubtedly one in every of crypto’s craziest occasions – the collapse of FTX and Alameda.
So how did this occur? Did the de-pegging of TerraUSD, Luna’s failure, and the chapter of 3AC all result in FTX and Alameda’s fall from grace?
Or was it mismanagement of threat and misuse of consumers’ funds all alongside?
Nansen has compiled an in-depth analysis utilizing on-chain knowledge to piece collectively the fallen dominos of FTX and Alameda. The place doable, we aspire to present an goal account backed by on-chain proof. Our examine doesn’t cowl potential off-chain occasions. This research leverages Nansen’s labeling heuristics to trace recognized wallets of the concerned entities and confirm their actions on-chain, to make sense of what really occurred throughout the FTX-Alameda debacle.
Methodology
To place it merely, our on-chain analysis makes use of data from a blockchain ledger to find out the sequence of occasions and fund balances associated to the autumn of FTX and Alameda. Analysis Analysts look at the transaction knowledge and crypto pockets actions of the concerned entities, two major knowledge sources helpful when attempting to piece collectively what had occurred.
Utilizing a confirmed methodology that we had beforehand used for different on-chain analyses (TerraUSD de-peg, stETH de-peg), we framed our examine utilizing a grounded idea method the place an inventory of pockets balances and transaction volumes processed by these wallets are on the core of this examine. Via a evaluate of gray literature akin to social media discussion board threads, media protection, and podcasts, we narrowed the scope of our examine to deal with transactional knowledge within the following timeframes:
- Till Could 2019: Early on-chain Alameda involvement in FTX
- August 2019 – January 2020: FTT as FTX-Alameda’s love little one
- Could 2022 – July 2022: Learning Alameda’s response to the UST collapse and its fallout, in addition to a possible mortgage given by FTX with FTT as collateral
- September 2022 – Now: Latest occasions and fall of FTX and Alameda
We additionally paid shut consideration to a set of pockets addresses which now we have recognized as both FTX’s or Alameda’s, you possibly can see the record of addresses and labels within the Appendix Part.
The report is formatted in three distinct sections. Half 1 acts as a prologue, offering the context to navigate the connection between FTX, Alameda, and their interactions with the FTX Token (FTT). Half 2 particulars the interplay and entanglement between FTX and Alameda by a few of the vital occasions within the current market cycle. Lastly, Half 3 zooms in on the on-chain knowledge, primarily between 2 November and 9 November. We try and triangulate widespread (on-line) narratives with the variable on-chain footprints to make sense of FTX’s and Alameda’s positions and holdings throughout this era.
Unique Sin?
It’s no secret that Alameda and FTX have been each based by SBF, and had ongoing partnerships. Nonetheless, it’s rumored that FTX was solely actually began to lift funds for Alameda and the 2 colluded from the very starting.
We leveraged on-chain proof to attract doable interpretations.
Could 2019: Early on-chain Alameda involvement in FTX
It’s no secret that Alameda was one in every of, if not the earliest, liquidity suppliers on FTX. Nonetheless, this poses a query of how concerned the 2 entities have been.
What was noticed:
Alameda’s pockets interacted with FTX earlier than it had even launched in Could 2019; aside from different CEX addresses, it was the one clearly identifiable counterparty.
What it might imply:
Though comparatively low in quantity (~$160k), this strongly means that both Alameda was closely concerned in FTX’s inception or there was no clear separation between Alameda and FTX then – and maybe, even each.
July 2019 – Jan 2021: Launch of FTT and early distribution
FTT is a utility token for the FTX platform, it doesn’t entitle customers to part of the platform income or symbolize a share in FTX. It’s not backed nor does it give management over governance choices or FTX’s treasury.
Given the ties between Alameda and FTX, it comes as no shock that Alameda was in FTT’s seed spherical, however have been they extra than simply common traders?
The FTT itemizing
What we noticed:
Two days earlier than the official itemizing on FTX on 29 July 2019, Alameda acquired 5m FTT in three transactions straight from the FTX Deployer (who minted the FTT) to their FTX account. Moreover, 20m FTT have been deposited by the FTX Deployer to an FTX-related FTX deposit pockets on the day of the itemizing. These have been the whole lot of FTT in circulation on the time.
Roughly every week after the itemizing, 5m FTT was despatched again to the FTX Deployer on 5 August 2019.
What it might imply:
The 5m FTT returned to the FTX Deployer are more likely to be the identical ones deposited into the Alameda FTX account.
- The quantities matched completely
- Extremely unlikely that some other celebration besides FTX itself had this many tokens on the time (25% of the circulating provide)
- As a seed investor, Alameda technically mustn’t have absolutely transferable tokens on the time within the first place
An optimistic interpretation can be that Alameda was concerned within the market-making of FTT tokens. This idea, nevertheless, doesn’t clarify why the funds have been despatched again solely after a couple of days.
A pessimistic interpretation can be that Alameda profited off the ICO contributors by promoting the tokens earlier than different traders’ tokens have been unlocked and shopping for them again cheaper in a while FTX.
Following the FTT ICO path
What we noticed:
Utilizing the official token distribution from the FTX docs and evaluating it to on-chain actions ranging from the primary token actions after minting in late July 2019 till December 2020, a possible state of affairs could be devised for the early distribution of FTT:
Observing the above parameters, we famous some key observations:
- Out of the 350m complete provide of FTT, 280m of it was managed by FTX (~80%).
- Out of the 59.3m tokens for seed and personal rounds, presumably within the 3-month vesting contract, round 27m (or roughly 46%) ended up on Alameda’s FTX deposit pockets (see Appendix for particulars), which is a substantial focus.
- The entire firm tokens (FTT), in addition to most unsold non-company tokens, have been deposited right into a 3-year vesting contract, with an Alameda deal with as the only beneficiary.
- 10.7m FTT are unaccounted for, and 10m FTT stay untouched at deal with 0x4aa.
What it might imply:
Our observations raised additional questions: Why was there a necessity for FTX to have such a concentrated provide of tokens? Why would they select a pockets (Alameda’s) because the beneficiary for the FTT firm tokens, that’s not straight managed by FTX themselves?
There was, nevertheless, a limitation in using on-chain knowledge to floor solutions to those questions. Due to this fact, we targeted on what could be answered by on-chain knowledge as a substitute.
Early transaction exercise of FTT instructed that:
The Good, The Dangerous, The Bailout
Jan 2021 – December 2021: Shared success within the bull market
Quick ahead to the bull market of 2021, the FTT token noticed a meteoric rise, roughly 800x from the seed price of $0.10 to $84 at ATH in summer season 2021.
The rise within the price of FTT noticed the absolutely diluted valuation of FTT reached nearly $30b on the all-time highs – most of which have been owned by Alameda and FTX.
Despite the fact that the tokens are technically liquid, these portions would have been unimaginable to liquidate for Alameda within the open market. Alameda promoting might trigger broad downward swings in price, and in flip devalue their very own remaining positions in addition to these of the opposite holders, with FTX being by far the biggest. This was a gordian knot for Alameda’s FTT holdings and created an additional co-dependency between Alameda and FTX.
With Alameda not with the ability to promote its FTT holdings in massive portions, and FTT not producing sufficient liquid income, the potential choices for them to acquire liquidity utilizing FTT have been:
- OTC: Promoting FTT outdoors the market with out impacting the price both by utilizing FTT to make investments (e.g. in enterprise offers or by way of an incubator) or promote FTT OTC (e.g. by way of a market-maker like Genesis).
- LP: Incomes by offering liquidity for FTT markets or derivatives (e.g. on FTX).
- Borrow: Utilizing FTT as collateral to borrow in opposition to it (e.g. on FTX or Genesis).
Notice that lots of the methods to entry liquidity utilizing FTT have been already carried out by FTX from the beginning, with FTX customers because the counterparty.
Whereas OTC promoting and liquidity provision are comparatively much less dangerous, borrowing in opposition to FTT is taken into account dangerous as a liquidation occasion would have a big unfavorable impression on each FTX and Alameda.
So the query stays, did Alameda use the unrealizable e book worth of their FTT to borrow funds?
What we noticed:
There have been massive FTT transactions between FTX, Alameda, and Genesis Trading:
In September 2021, there have been common inflows and outflows from FTX and Alameda into Genesis Trading. First, we noticed a rise in sizable deposits from FTX to Genesis, adopted by a big switch of FTT tokens from Genesis to Alameda’s FTX deal with.
It may very well be doable that FTX despatched FTT to Genesis with the intention for the FTT for use as collateral for a mortgage to Alameda. Nonetheless, if this assumption was true then why did Genesis ship Alameda the 20m FTT ($1.6b) as a substitute of different, extra liquid tokens? Such an prevalence contradicts the logic that FTT was meant as collateral on account of its low liquidity.
Then, in December 2021, Alameda despatched a big FTT deposit to Genesis Trading pockets, totaling roughly 38m FTT or $1.7b on the time:
What this might imply:
Alameda might have both tried to promote some FTT OTC to Genesis, or tried to make use of the transferred FTT as collateral for a mortgage from Genesis. Nonetheless, as Genesis is a centralized platform, we’re unable to find out this primarily utilizing our on-chain knowledge sources.
Moreover, particular outflows from centralized platforms akin to Genesis are exhausting to hint on-chain, therefore, it’s difficult to pinpoint precisely how a lot Alameda had probably borrowed.
Alameda was additionally noticed to be utilizing FTT as collateral to borrow funds on DeFi platforms akin to Abracadabra Cash (MIM), although presumably on a a lot smaller scale in comparison with their interactions with CeFi lenders akin to Genesis.
The on-chain knowledge for FTT thus far hints on the following technique:
%20(1).png "Blockchain Evaluation: The Collapse of Alameda and FTX - Coin Trolly 7")
Nonetheless, by using this technique – taking out loans with FTT as collateral and utilizing the mortgage to make additional investments – would have put them successfully in a leveraged lengthy place.
FTT would have been a central weak spot for Alameda and FTX, with price drops posing a really actual menace. The relatively skinny liquidity in comparison with complete provide would have made massive market gross sales very harmful (e.g. by liquidation of Alameda’s borrowing positions, the chapter of corporations that personal numerous FTT, or “dumping” by different massive holders like Binance).
Could 2022 – June 2022: Potential disaster
While this technique might have labored effectively within the bull market of 2021, it might have turned bitter when markets began to go in opposition to their favor, particularly throughout the Could/June 2022 crash:
- OTC: Demand to purchase OTC decreases
- LP: Quantity, charges and particularly buy-side demand for FTT dry up
- Borrow: With FTT costs falling, FTT collateralized loans grow to be riskier. Moreover borrowing liquidity is drying up, borrowing charges improve (& margin calls), and collectors recall their loans on account of basic market circumstances worsening.
Provided that vital parts of Alameda’s stability sheet had consisted of illiquid property, Alameda might have confronted critical liquidity challenges throughout the Could/June 2022 interval.
With the UST de-peg and the way the state of affairs had unfolded, many entities have been adversely impacted then. For full protection of how the UST de-peg unfolded and the entities concerned, our crew had lined the state of affairs in-depth right here.
The following contagion took down 3AC and Celsius in mid-June 2022 which we had lined on this report; each have been debtors to Genesis (who might probably have had publicity to Alameda primarily based on their on-chain interactions involving the FTT token).
So did Alameda face a liquidity crunch in June, following the 3AC and Celsius collapse? Was there a rise in FTT token exercise by Alameda and its counterparts?
What we noticed:
Breaking down the chain of occasions, it is a quick run-down of what we had noticed on-chain:
Between June 9-23, Alameda acquired a big influx of FTT from 5 numerous entities: Fund:0xf155, Huobi, Genesis Trading OTC, Excessive Steadiness, and Discovered on Avalanche.
June 9
Excessive Steadiness acquired 2.7m FTT ($78m) from Celsius: Pockets, which was despatched to Alameda FTX deposit.
June 10
Excessive Steadiness acquired one other 1.6m FTT ($45.6m) from Celsius: Pockets, which was additionally despatched to Alameda’s FTX deposit. The spike of FTT influx to Excessive Steadiness pockets was evident on each June 9 and June 10 (as seen within the screenshot under).
June 13
Excessive Steadiness acquired one other 600k FTT ($14.6m) which was despatched to Alameda FTX deposit.
June 14
Fund:0xf155 usually receives their FTT tokens from FTX and BlockFi which is shipped out to Alameda’s pockets, together with 27.5m ($631m) FTT from FTX which was then instantly despatched again to FTX.
Genesis Trading: OTC desk despatched 3.7m FTT ($89m) to Alameda FTX deposit.
June 15
Huobi despatched a complete of 788k FTT ($18.9m) to Alameda FTX deposit.
June 16
Fund: 0xf155 acquired 14m FTT ($326m) and it was despatched on to Alameda FTX deposit.
June 17
Alameda FTX deposit acquired 6.2m FTT ($151m) from Genesis Trading: OTC desk and 18m FTT ($450m) from Fund: 0xf155, which they’d acquired earlier that day.
June 18
Fund: 0xf155 despatched 27m FTT ($631m) to Alameda FTX deposit.
June 20
Genesis Trading: OTC desk despatched a complete of 13.6m FTT ($364m) to Alameda FTX deposit.
June 21
Discovered on Avalanche despatched 2.3m FTT ($63m) to Alameda FTX deposit.
June 22
Alameda FTX deposit acquired 408k FTT ($11m) from Excessive Steadiness and 249k FTT ($6m) from Discovered on Avalanche.
June 23
Genesis Trading: OTC desk despatched 14.5m FTT ($381m) to Alameda FTX deposit.
June 29
Huobi sends the biggest variety of FTT to Alameda FTX deposits because the Terra / UST disaster. A complete of 18.4m FTT ($47.2m) was transferred.
June 14 – July 1
Between June 14 and July 1, Genesis despatched a complete of 56.6m FTT ($1.4b) to Alameda’s FTX Deposit. The numerous on-chain switch volumes might counsel that Genesis was probably a key lender to Alameda.
June 2022: Saving Alameda by an FTT-backed mortgage?
Certainly, if Alameda had liquidity points, they may have been in a really tight spot with restricted choices for orderly liquidating its property to satisfy capital necessities.
With lenders usually being cautious after the 3AC disaster, borrowing straight from FTX might have appeared like the one easy lifeline to keep away from chapter:
In line with the newest report by New York Instances on How Sam Bankman-Fried’s Crypto Empire collapsed, Alameda’s CEO confirmed that “over the recent months, Alameda had taken out loans and used the money to make VC investments, among other expenditures.” Alameda CEO additionally confirmed that “around the time the crypto markets crashed this spring, lenders moved to recall those loans but the funds that Alameda spent was no longer easily available.” Consequently, Alameda resorted to FTX’s buyer funds to make the funds.
Did Alameda actually obtain an FTT-backed mortgage from FTX?
We checked out FTT deposits from Alameda onto FTX which might have been posted as collateral, in addition to non-FTT outflows from FTX to Alameda.
Posting FTT as collateral
What we noticed:
There have been huge internet FTT inflows from Alameda to FTX throughout mid-June, coinciding with the 3AC collapse, totaling 163m FTT, value round $4b on the time.
It’s tough to appropriately attribute outflows from centralized platforms into entities on-chain, and a few of these funds might need circled again to Alameda straight or by way of a 3rd celebration and again to FTX once more. Due to this fact, the online values displayed within the chart might doubtless be larger than the precise internet influx.
A have a look at FTX’s person fund pockets reveals, nevertheless, that the stability on FTX rose from 14m FTT to 54m FTT, a rise of 40m FTT, ~$1.2b from mid-June to mid-July, most of which could be attributed to Alameda.
What this might imply:
Alameda deposited as a lot as ~$4b (primarily based on mapped internet inflows) value of FTT tokens on FTX between early June and July, with the height being throughout the 3AC collapse within the week of 12 June 2022.
That is consistent with the interview from Reuters with a number of individuals near Bankman-Fried, revealing a $4b mortgage from FTX to Alameda backed by FTT tokens, Robinhood shares, and different property.
Loans from FTX
The query of whether or not FTX supplied funds to Alameda, can’t be conclusively answered by on-chain knowledge alone.
FTX might have despatched the funds to any recipient, together with the creditor straight, in any token, on (nearly) any chain in addition to supplied the funds fully off-chain.
Moreover, pockets stability modifications is inconclusive as effectively.
As for the FTX pockets balances, many withdrew funds from the change throughout these turbulent instances, resulting in excessive fluctuations within the complete stability. Moreover, it’s unclear what the precise stability of funds ought to have been, so figuring out a possible delta can also be not an choice.
What may very well be seen have been numerous token flows between FTX and Alameda with values starting from tens of hundreds to tens of tens of millions in USD worth. Whereas we did observe a couple of unusually massive transactions with transaction values within the lots of of tens of millions in USD worth, we didn’t have adequate proof to triangulate and deem these transactions to be “suspicious” or to totally again the speculation.
Nonetheless, it stays a thriller as to what was the aim of those following massive transactions.
- On 12 Could 2022, FTX transferred 90k ETH ($211m) + 6.8m FTT ($224.7m) to Alameda: 0x780 and transferred them to Genesis. The 6.8m FTT was acquired from the Excessive Steadiness pockets, funded by Celsius.
- On 12 Could 2022, FTX despatched one other 155,443 ETH ($323.4m) to Alameda 0x780 which was finally transferred to Genesis as soon as extra.
- On 26 Could 2022, FTX despatched 3.5m FTT ($103m) to Alameda Analysis: 0x780, which was finally transferred to Genesis as soon as extra.
To Fall, Falter, and Fail: SBF’s Crypto Empire Collapses
We summarized the occasions that brought on the “death-spiral” of each FTX and Alameda:
Sept 28
Alameda acquired 174m FTT ($4.1b) from the FTT ICO Contract and despatched it to the FTX Deployer. This might both have been associated to the “FTX loan in May / June” or FTX having to assert FTT tokens by Alameda’s pockets because of the inter-linked relationship between FTX and Alameda. All withdrawals from the FTT firm tokens vesting contract should undergo this Alameda pockets as it’s declared the one beneficiary from the beginning (see Appendix). Nonetheless, them withdrawing all the remaining tokens and sending them to FTX Deployer leaves a bitter style in gentle of the mortgage settlement.
Oct 31- 1 Nov
An uncommon record of steady stablecoin transfers from FTX Worldwide and FTX US to Alameda’s Circle, Binance and FTX pockets was noticed. These stablecoins included USDC, BUSD, TUSD,PAX,TUSD and amounted to a complete of $388m USD.
Nov 2
CoinDesk releases a report on Alameda’s stability sheet. It revealed that $5.8b of the $14.6b property on Alameda’s stability sheet have been reportedly in FTT and different Solana ecosystem tokens. Nearly all of internet fairness in Alameda’s enterprise was really FTX’s personal centrally-controlled token, FTT.
Nov 6
Alameda CEO makes a press release on the stability sheet report from Coindesk and clarifies that Alameda had >$10b of property that weren’t mirrored within the piece. She doesn’t make clear liabilities that weren’t listed within the report. The Tweet has since been deleted, and we weren’t in a position to absolutely confirm her declare on-chain.
Binance CEO broadcasts that they’ve determined to liquidate the remaining FTT on their books, value ~$584m in FTT.
Alameda CEO provides to OTC purchase all of Binance’s FTT holdings for $22 per token, resulting in hypothesis that Alameda might have had loans that may have in any other case been liquidated if the price of FTT falls under $22. This Tweet has since been deleted.
The evaluate of recognized Alameda wallets on the Ethereum chain instructed that Alameda’s holdings on the Ethereum chain have been roughly valued at $21m on 6 Nov 2022 (primarily based on accessible Nansen knowledge) . Scrutiny of the on-chain knowledge revealed that it was extremely unlikely that Alameda had the liquidity to buy Binance’s FTT when Caroline tweeted publicly on 2 Nov 2022. So then, what was the motivation behind Caroline’s public supply to buy Binance’s FTTs?
Pockets balances obtained are primarily based on accessible Nansen knowledge. Precise pockets balances could also be larger (e.g. doesn’t take note of LP tokens and/or Alameda’s balances on CEXs)
.png "Blockchain Evaluation: The Collapse of Alameda and FTX - Coin Trolly 20")
Binance CEO reinforces a press release on liquidating their FTT holdings. There was no on-chain exercise to help this transfer on the time at which the assertion was made.
FTX CEO responded by clarifying that FTX is solvent, stating that “FTX is fine, assets are fine.” This Tweet has now been deleted.
Nov 7
Markets resort to panic mode. Nansen’s monitoring of the 7-day stablecoin flows confirmed a internet influx of $411.5m deposited into Binance, with a internet outflow of $451.1m in withdrawals from FTX in that interval.
Moreover, our on-chain examination dropped at consideration an inventory of (unusually) massive withdrawals previous to FTX’s collapse.
Entities who withdrew vital quantities 24 hours earlier than withdrawals have been halted:
The immense sell-pressure of FTT meant that the token finally broke decrease than $22 per token.
Nov 8
FTX appeared to have paused withdrawals as reported by The Block. Throughout this era, FTX despatched 92m ($37m) of BIT to 🤓 Alameda Analysis: 0x84d.
FTX CEO shared that Binance would enter right into a strategic transaction with FTX, of which Binance CEO introduced a non-binding Letter of Intent to totally purchase FTX and assist cowl its liquidity crunch.
It appeared that Binance was leaning in direction of scrapping FTX rescue takeover after taking first look at books. At this level within the timeline, FTX US had despatched $10m USDT to Alameda. Alameda Analysis then despatched 130k FTT (~$715k) to 🏦 Binance: Alameda Deposit. Lastly, FTX US despatched 2,262 WBTC ($41m) to 🤓 Alameda Analysis: WBTC which was later despatched to WBTC: Controller. It’s fascinating to notice that whereas FTX Worldwide had halted withdrawals, FTX US nonetheless managed to switch a large quantity of WBTC to Alameda. Alameda CEO additionally implied that solely the FTX Worldwide entity was going through liquidity points and that FTX US was unaffected.
Nov 9
The Wall Avenue Journal reported that Binance had walked away from the FTX deal.
Nov 11
FTX filed for Chapter 11 chapter proceedings, with the FTX CEO resigning
Conclusion
In line with an unverified insider supply that was leaked on Twitter as of 16 Nov, “Caroline painted Alameda and FTX getting liquidated as a likely event rather than a tail event.” Furthermore, FTX’s native token FTT was additionally a focus contributing to the fallout. The low float and fixed purchase stress from FTX implied that the one factor that would probably set off the FTT price to go down was an enormous promote stress for the token. Whereas the Coindesk report first garnered the general public’s consideration to the connection between Alameda & FTX, the “bank-run” on FTX had additionally coincided with the announcement that Binance was trying to liquidate the remaining FTT on their books.
Piecing collectively the items from our on-chain investigation, it was evident that the Luna/Terra collapse revealed a deep flaw between Alameda and FTX’s muddled relationship. There have been vital FTT outflows from Alameda to FTX across the Terra-Luna/ 3AC state of affairs. Based mostly on the information, the overall $4b FTT outflows from Alameda to FTX in June and July might presumably have been the availability of collateral that was used to safe the loans (value at the very least $4b) in Could / June that was revealed by a number of individuals near Bankman-Fried in a Reuters interview.
We additionally noticed barely uncommon massive steady outflows of stablecoin tokens from FTX to Alameda’s wallets throughout that point interval. Given the cascading impact of the Luna collapse, many companies like 3AC have been liquidated inflicting a contagion throughout the crypto lending market. Whereas our on-chain investigation didn’t straight confirm that person funds have been being siphoned from FTX to Alameda in makes an attempt to “save” them from liquidation, the unusually massive FTT inflows from FTX post-Luna/ 3AC trace at a believable case.
From this level on, the intermingled relationship between Alameda and FTX grew to become extra troubling, on condition that buyer funds have been additionally within the equation. Alameda was on the stage the place survival was its chosen precedence, and if one entity collapses, extra bother might begin brewing for FTX. Given how intertwined these entities have been set up to function, together with the over-leverage of collateral, our autopsy on-chain analysis hints that the eventual collapse of Alameda (and the ensuing impression on FTX) was, maybe, inevitable.
The sudden fallout of FTX had induced a rising concern throughout the crypto market contributors – each traders and merchants alike. If something, this example solely strengthens the necessity for extra transparency in crypto. Our crew at Nansen Portfolio have compiled real-time dashboards that showcase crypto exchanges’ proof-of-reserves. While the record of asset holdings is non-exhaustive, this is step one to holding crypto contributors extra accountable. Hyperlink to proof-of-reserves per entity by Nansen could be discovered right here.
If you are taken with testing the Change Flows dashboard, signal up for a trial as we speak!
The Epilogue: Fascinating Entities & Wallets
Throughout our investigation we famous a set of wallets that will or will not be Alameda/ FTX’s addresses. Remark of on-chain actions and interactions trace at a excessive probability that these wallets had an oblique publicity with Alameda. For many who are taken with exploring these wallets, now we have supplied a quick description of the related actions.
To get a greater understanding of our pockets labels, learn extra right here.
Appendix
Mapping technique of official FTT distribution to on-chain actions and addresses
350m minted in complete and distributed in late July 2019 by Deployer, from there:
1. 5m goes straight to Alameda’s FTX Deposit earlier than FTT token itemizing on FTX and 5m was returned from FTX shorty after the itemizing.
- 5m tokens was transferred to FTX: 0x2fa and sure will get credited to Alameda’s FTX account
- 5m returned from FTX: 0x2fa 6 days after launch. In all probability the identical tokens from Alameda as nobody else ought to have this measurement at this level and there can be no purpose for FTX to withdraw tokens. These transactions sum up to internet 0 and the tokens finish up again on the FTX deployer after which within the 3month vesting contract.
2. 20m will get transferred to FTX Deposit: 0x23b
- Probably the funds for Liquidity provision as said within the tokenomics
3. 255m FTT tokens allotted to FTT Firm Unlock Good Contract
- 175m FTT to FTX (nearly sure) + 105m FTT transferred to different entities and never bought (nearly sure) – 20m FTT as preliminary liquidity (nearly sure) – 5m FTT to Advisors = 255m
- Unlocks linearly however needs to be claimed and if left untouched, the “claimable amount” simply will increase till it’s claimed (see contract particulars)
- The only beneficiary of the contract is that this Alameda pockets (see contract particulars and withdrawals from the FTT Firm Token Contract) which sends all of it again to the FTX deployer (who sends it to FTX) apart from 9m to Millionaire: 0xef9
Judging by the quantity, these are nearly definitely the FTX firm and FTX firm administrated tokens. The Alameda deal with being the one beneficiary of the vesting contract is an indication of a really shut connection between the businesses. If the Alameda pockets receives FTT from the contract they doubtless really belong to FTX. They often ahead them in some unspecified time in the future and do nothing with them.
4. 75m into 3month unlock contract
- 59.3m to Investor rounds (nearly sure) + 5m to Advisors (doubtless) + 10.7m unaccounted from tokenomics doc (doubtless)
5m again to FTX Deployer which ended up on FTX deposits 0xa5d and 0x23b, may very well be Advisor tokens or a mixture of advisor and early traders (doubtless)
10m to Token Millionaire: 0x4aa (sits there until as we speak)
20m to FTX Deposit:0xa5d (identical one the FTX Deployer deposited in, doubtless affiliated with FTX and/or Alameda), tokens doubtless distributed to FTT early traders, distributed by way of the FTX platform
40m to token Millionaire: 0xef9, who additionally acquired 9m from Alameda across the identical time
- 1.5m FTT nonetheless stays there
- 20m to FTX Deposit: 0xa5d (identical the place the 3mo unlock went and FTX deployer despatched funds as effectively), Additional distribution to early FTT traders (doubtless)
27.5m to EIP1559 person: 0x209 who sends:
Total it’s doubtless that at the very least 307m tokens out of 355m tokens (86%) of all FTT have been initially managed by Alameda or FTX. With one other 12m tokens not being distributed and remaining untouched all through the years in wallets with unknown homeowners, this proportion may very well be as excessive as ~90%.
Alameda / FTX FTT transactions with Genesis Trading
Nansen pockets labels and addresses
