Bankrupt Crypto Firms Alameda Research and FTX Move $10 Million in Crypto to Exchange Accounts, Raising Questions

Wallets linked to bankrupt crypto firms Alameda Research and FTX moved over $10 million worth of cryptocurrency to a single wallet address, which then deposited the funds to exchange deposit accounts.

#FTX and #Alameda related addresses are depositing tokens to exchanges!

Via address 0xde9, #FTX 0x97f and #Alameda 0xf02 have transferred

2,904 $ETH ($5.21M)
1,341 $MKR ($2.01M)
11,975 $AAVE ($1.02M)
198,807 $LINK ($2.27M)

to #Binance and #Coinbase in the past 5 hours.… pic.twitter.com/MQxCySp8g0

— Spot On Chain (@spotonchain) October 25, 2023

On October 25, data from Spot On Chain showed that the bankrupt firm sent $10 million worth of crypto to a single wallet address in five hours from October 24 to October 25, which then deposited the funds to Coinbase, Binance, and Wintermute.

The movement of these funds has triggered speculation that it could be the beginning of an impending asset selloff amid the exchange’s bankruptcy proceedings. The company is preparing to liquidate some of its assets in order to repay creditors, a move prompted by the criminal trial of FTX founder Sam Bankman-Fried in a U.S. court.

These transfers came from three addresses associated with FTX and Alameda, which is also owned by FTX, moving $10 million worth of digital assets from the Solana network to Ethereum.

According to Spot on Chain data, an address listed as “likely” belonging to FTX transferred 2,904 Ether, worth over $5.14 million at the time, to the central address at 8:18 pm UTC on October 24.

A few minutes after receiving the 2,904 ETH tokens, the address sent 1,000 ETH to a Coinbase address and 1,904 ETH tokens to a Binance deposit address on Wintermute. This represented the first batch of transactions.

Thirty-nine minutes later, a wallet identified as belonging to Alameda Research sent $3.16 million worth of tokens to this address, including some 198,807 Chainlink (LINK) and 11,974 Aave (AAVE).

At around 2:00 am UTC on October 25, an FTX cold wallet moved 1,341 Maker (MKR) worth $2.09 million to the same address.

Over the next five hours, an additional $5 million worth of cryptocurrency was sent to this address by FTX and Alameda wallets, including some COMP.

The total value of cryptocurrency sent to exchange deposit addresses during this period was $10,362,403, according to Spot on Chain data.

Since its collapse in 2022, the defunct exchange, formerly led by Sam Bankman-Fried, has grappled with several regulatory challenges and a questionable reputation.

On August 24, FTX proposed a plan to appoint Mike Novogratz’s Galaxy Digital Capital Management as the investment manager charged with overseeing the sale and management of its recovered crypto holdings.

In an April 12 hearing, FTX disclosed that it had recovered roughly $7.3 billion in liquid assets, with $4.8 billion of that sum being assets recovered as of November 2022. According to documents raised in the hearing, FTX held a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices as of April 12.

On September 13, a Delaware Bankruptcy Court approved a plan to liquidate $3.4 billion worth of crypto assets that FTX and Alameda Research held.

The announcement has raised concerns that selling such a substantial amount of cryptocurrency could trigger a market downturn. Nevertheless, experts have pointed out that the gradual and phased approach to this liquidation should help mitigate its impact on the market.

These recent transfers are part of a series of fund movements conducted by FTX wallets since the company filed for bankruptcy. In a previous development in early October, the group staked over $150 million worth of ether (ETH) and Solana’s SOL tokens, potentially earning yields of up to 8% on these holdings.

These transactions coincide with the 12th day of Sam Bankman-Fried’s trial, which revolves around fraud-related charges in a Manhattan federal court.

The trial has brought to light several revelations, primarily stemming from testimonies provided by Bankman-Fried’s former associates, including Caroline Ellison, the former CEO of Alameda.

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