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 the former CEO of FTX, 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 40%, a substantial share of FTT tokens, valued at $14.6 billion in September 2022. However, a report by the analytics firm Nansen, as cited by Cointelegraph, revealed 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 supply (350 million FTT tokens). 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 occurred 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% ($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".