• Sat. Jan 28th, 2023

FTX (FTT) May Have Been Pushed To Brink Of Collapse Due To ‘Secretive’ Alameda Bailout, Says Crypto Analyst – FTX Token (FTT/USD)

ByMehab Qureshi

Nov 9, 2022
FTX (FTT) May Have Been Pushed To Brink Of Collapse Due To 'Secretive' Alameda Bailout, Says Crypto Analyst - FTX Token (FTT/USD)

It appears that FTX FTT/USD may have provided a large-scale bailout to Alameda in the second quarter, which could be the reason for its collapse. FTX and Alameda are sister companies owned by Sam Bankman-Fried.

What Happened: CoinMetrics research director Lucas Nuzzi posted his analysis on Twitter stating that 40 days ago, on Sep. 28, over 173 million FTT tokens worth over $4 billion became active on-chain. 

See More: How to Use Binance Smart Chain 

On the same day, over $8.6 billion worth of FTT was moved on-chain. “That was by far the largest daily move of FTT”, Nuzzi said. But, guess what? The recipient of the $4.19 billion worth of FTT tokens was no one but Alameda Research, as per the researcher.

According to Nuzzi, Alameda then sent that entire balance to the address of the deployer (creator) of the FTT, which is controlled by someone at FTX. “In other words, Alameda auto-vested $4.19 billion dollars worth of FTT just to send it immediately back to FTX.” 

The Catch: The reason for doing this was simply a survival technique. Had FTX let Alameda implode in May, their collapse would have ensured the subsequent liquidation of all FTT tokens vested in September. It would have been terrible for FTX, so they had to find a way to avoid this scenario.

Interestingly, on the same day (Sept. 28) Bankman-Fried tweeted that he is just “rotating a few FTX wallets today (mostly non-circulating); we do this periodically. Might be a few more coming, won’t have any effect.” 

Nuzzi has also speculated that it is possible that people at Binance were aware of this arrangement between FTX and Alameda.

Price Action: FTT was trading at $4.63, down by 72% at the time of writing, according to Benzinga Pro.

Read Next: Will Coinbase End Up Like FTX? CEO Brian Armstrong Says ‘We Don’t Engage In…’



Image and article originally from www.benzinga.com. Read the original article here.