The collapse of FTX, a major cryptocurrency exchange, has been in the spotlight lately. FTX's decline was largely due to initial reports indicating that a substantial portion of Alameda Research's assets, representing 40% of its $14.6 billion in assets as of September 2022, were held in FTT tokens.
Nansen blockchain data analysts have delved deeper into this story, focusing on the massive transfer of FTT tokens worth $4.1 billion between FTX and Alameda Research, two companies founded by Sam Bankman-Fried.
According to Nansen's analysis, the on-chain interactions between FTX and Alameda became intriguing before reports of FTT token exposure surfaced. Alameda transferred $4.1 billion in FTT tokens to FTX between September 28 and November 1, along with transactions involving US dollar-pegged stablecoins totaling $388 million.
The blockchain data also revealed that FTX held approximately 80% of the total FTT token supply, which amounted to 280 million tokens. This suggests that both companies could have supported each other's balance sheets.
Furthermore, it is proposed that Alameda may have sold FTT tokens without restrictions and used them as collateral for loans from cryptocurrency lending companies. This is supported by historical on-chain data showing significant transactions between FTX, Alameda and Genesis Trading wallets, with volumes reaching $1.7 billion in December 2021.
The collapse of the Terra ecosystem and the subsequent bankruptcy of Three Arrows Capital (3AC) appear to have caused liquidity problems for Alameda due to the declining value of FTT. This led to a secret $4 billion FTX loan backed by FTT.
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