FTX And Alameda Research Manipulated The Crypto Market With Bots

New research has revealed that Twitter bot accounts may have caused a rise in the prices of digital assets listed on FTX, a crypto exchange that was facing challenges.

Alameda Research, FTX’s hedge fund arm, was involved in trading these assets. The Network Contagion Research Institute (NCRI) conducted a study on over three million tweets between January 1, 2019, and January 27, 2023, that mentioned 18 cryptocurrencies previously listed on FTX.

The study shows that Sam Bankman-Fried, FTX’s former head, was aware of the significant impact that Twitter had on crypto prices.

There is a concerning trend in the crypto industry, as noted by Bankman-Fried during FTX’s peak. Social media hype often leads to perceived value surpassing intrinsic worth, resulting in inflated market capitalizations.

Bankman-Fried explained that even a simple “box token” could gain a $20 million market cap if hyped enough on Twitter.

This shows how aware Bankman-Fried is of Twitter’s influence on the cryptocurrency market. Recently, a study has raised questions about whether FTX, which went bankrupt in November, used Twitter to manipulate the crypto markets.

Researchers from NCRI found evidence that bot-like tweets had an impact on token prices.

“It begs the question, did FTX or Alameda engage in coordinated inauthentic activity on social media to artificially inflate market values?”

The notes continued and revealed the following:

“NCRI’s study suggests that the intensification of social media activity was not merely an organic outcome of the coins’ popularity, but potentially a strategic ploy to influence market sentiment. Contrary to conventional wisdom, NCRI’s findings show that it was not just price variations that significantly influenced tweet volumes, but that the reverse was true as well.”

According to NCRI researchers, there has been a rise in “fake comments resembling those from bots” regarding the 18 tokens promoted by FTX.

These tokens include Render (RNDR), The Sandbox (SAND), Immutable (IMX), and Gala (GALA).