Alameda sent $4.1B of FTT tokens to FTX before crash: Nansen report
Blockchain data analysts from Nansen have revisited the days leading up to the collapse of FTX, including the transfer of $4.1 billion worth of FTT tokens between the exchange and Alameda Research.
A Nansen report shared with Cointelegraph reveals unique observations from the blockchain analytics firm, highlighting the close relationship between the two companies founded by Sam Bankman-Fried as the former FTX CEO appears in court to face a litany of charges relating to the collapse of the exchange.
The collapse of FTX is widely reported to have been sparked by initial reports that flagged the significant 40% share of Alameda’s $14.6 billion in assets held in FTT tokens in September 2022.
Nansen analysts revealed that they had observed dubious on-chain interactions between FTX and Alameda before these reports came to light. Between Sept. 28 and Nov. 1, Alameda sent $4.1 billion FTT tokens to FTX and several continuous transfers of United States dollar-pegged stablecoins amounting to $388 million.
On-chain data also indicated that FTX held around 280 million FTT tokens (80%) of the total 350 million FTT supply. Blockchain data reflects “considerable” proportions of FTT trading volume amounting to billions of dollars flowing between various FTX and Alameda wallets.
Nansen also highlights that most of the FTT token supply, consisting of company tokens and unsold non-company tokens, was locked in a three-year vesting contract. The lone beneficiary of the contract is an Alameda-controlled wallet, according to the analysts.
Given that the two companies controlled around 90% of the FTT token supply, Nansen suggests that the entities were able to prop up each other’s balance sheets.
The report also suggests that Alameda most likely sold FTT tokens over-the-counter, as well as for collateral for loans from cryptocurrency lending firms.
“This theory is backed by historical on-chain data where we observed regular large inflows and outflows between FTX, Alameda and Genesis Trading wallets with transfer volumes up to $1.7 billion as seen in Dec 2021.”
The collapse of the Terra ecosystem and subsequent bankruptcy of Three Arrows Capital (3AC) likely led to liquidity issues for Alameda due to the drop in value of FTT, which led to a covert, $4 billion FTT-backed loan from FTX.
“Our on-chain data indicates that this may have happened. Amidst the collapse of 3AC in mid-June 2022, Alameda sent ~163m of FTT to FTX wallets, worth ~$4b at that time.”
The researchers claim that the $4 billion transaction volume coincided with a $4 billion loan figure that close associates of Bankman-Fried had divulged in an interview with Reuters.
Blockchain data also reflects how Alameda would not have been able to make good on an offer to buy FTT tokens from Binance at $22 on Nov. 6. This was after Binance CEO Changpeng Zhao announced that the exchange would offload its tokens following disparaging reports about Alameda’s balance sheet.
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The Home Office has lost a Court of Appeal bid to challenge a High Court ruling granting an Eritrean man a temporary block on being deported to France.
The ruling will be a blow to ministers, who had been hoping to make headway with their “one in, one out” migrant returns deal with France.
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Under the deal, the UK can send back any migrant who crosses the Channel illegally in return for accepting the same number of migrants in France who have a valid asylum claim here.
However, only four people have been deported under the scheme so far, including one Afghan individual who was deported to France this afternoon.
The Eritrean man was granted a temporary block on his removal after he claimed he had been a victim of modern slavery.
The government has said up to 50 people a week could be deported under the scheme initially, but it believes numbers would grow and eventually act as a deterrent to those considering making the dangerous journey across the Channel.
Last Friday saw more than 1,000 people cross the Channel to the UK in small boats – the day after the first migrant was deported under the “one in, one out” deal.
The latest Home Office figures show 1,072 people made the journey in 13 boats – averaging more than 82 people per boat. It means the number of migrants arriving in the UK after crossing the English Channel has topped 30,000 for the year so far.
Migrants arrive at Dover. Pic: PA
Shabana Mahmood, who was promoted to home secretary in the prime minister’s reshuffle earlier this month, has accused migrants who try to block their deportation of making a “mockery” of the UK’s modern slavery laws.
She has vowed to do “whatever it takes” to end crossings – but the Conservatives have branded the “one in, one out” deal with France “meagre” and have called for their Rwanda policy to be reinstated.
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Chris Philp, the shadow home secretary, said: “Yet again the courts have stepped in to block a deportation, proving what we warned from the start, unless you tackle the lawfare strangling Britain’s borders, nothing will change.
“This is nothing but a gimmick. Even if by some miracle it worked, it would still be no deterrent, as 94 per cent of arrivals would still stay.”
Meanwhile, Reform UK has promised to crack down on both legal and illegal migration.
Last month, party leader Nigel Farage outlined plans to deport hundreds of thousands of illegal migrants in the first parliament of a potential Reform UK government.
On Monday, he announced fresh policies to reduce legal migration, saying his party would ban access to benefits to migrants and get rid of indefinite leave to remain – the term used to describe the right to settle in the UK, with access to benefits, after five years.
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