Did this Coin Metrics analyst uncover the key to the whole Alameda\/ FTX story? Because let\u2019s face it, it doesn\u2019t make sense. Both of Sam Bankman-Fried\u2019s businesses were extremely profitable. FTX was the world\u2019s third-biggest exchange and growing, why would anyone risk killing that golden goose? There must have been an underlying cause. Did this Coin Metrics analyst uncover it in the on-chain data? He might have.<\/p>\n
The Head of R&D at Coin Metrics, Lucas Nuzzi, ends his thread<\/a> with a warning: \u201cImportant to note that this is my own personal highly-speculative take on what happened based on these on-chain artifacts.\u201d The case the Coin Metrics analyst is making rests on solid on-chain data, but the interpretation of what said data means is \u201chighly-speculative.\u201d So, take it with a grain of salt and don\u2019t go around saying this is exactly what happened, because it might not be.\u00a0<\/p>\n That being said, yikes!\u00a0<\/p>\n Lucas Nuzzi starts with a statement of fact, \u201cI found evidence that FTX might have provided a massive bailout for Alameda in Q2 which now came back to haunt them.\u201d And then, he poses a mystery. \u201c40 days ago, 173 million FTT tokens worth over 4B USD became active on-chain.\u201d Where did those tokens go? You guessed it, Alameda Research. The day was September 28th. A record-breaking $8.6B in FTT moved that day.<\/p>\n 2\/ That day, September 28, over 8.6 Billion USD worth of FTT was moved on-chain.<\/p>\n That was by far the largest daily move of FTT in the token’s existence and one of the largest ERC20 daily moves we ever recorded at Coin Metrics. pic.twitter.com\/GnUO1ZcCB7<\/a><\/p>\n \u2014 Lucas Nuzzi (@LucasNuzzi) November 8, 2022<\/a><\/p>\n\n \u201cThat was by far the largest daily move of FTT in the token\u2019s existence and one of the largest ERC20 daily moves we ever recorded at Coin Metrics,\u201d Nuzzi tweeted. What was happening around Alameda and FTX near that time? Nothing special, really.<\/p>\n On August 24th, Sam Trabucco stepped down from the Co-CEO position at Alameda Research. \u201cI will stay on as an advisor, but otherwise will not continue to have a strong day-to-day presence at the company,\u201d Trabucco tweeted<\/a>. If all of this is true, that last SBF tweet will probably make an appearance in court.<\/p>\n\n FTT price chart for 11\/09\/2022 on FTX | Source: FTT\/USD on TradingView.com<\/a><\/p>\n Believe it or not, the FTT tokens came directly from the original ICO smart contract. The Coin Metrics analyst \u201cfound a peculiar transaction that interacted with a contract from the FTT ICO. This 2019 contract *automatically* released 173 Million FTT from the token\u2019s ICO.\u201d Strange, but both organizations are joined at the hip. There might\u2019ve been legitimate reasons.<\/p>\n Then, things took a bizarre turn. \u201cAlameda then sent that *entire* balance to the address of the deployer (creator) of the FTT ERC20, which is controlled by someone at FTX.\u201d<\/p>\n WHAT?<\/p>\n 4\/ The recipient of the $4.19 B USD worth of FTT tokens was no one but Alameda Research!<\/p>\n So what? Alameda and FTX were intrinsically connected from day 1 and Alameda obviously participated in the FTX ICO.<\/p>\n But what happened next was interesting\u2026<\/p>\n \u2014 Lucas Nuzzi (@LucasNuzzi) November 8, 2022<\/a><\/p>\n\n \u00a0<\/p>\n According to Lucas Nuzzi, Alameda Research wasn\u2019t immune to the crypto contagion that plagued the space in Q2. In fact, the company might\u2019ve blown up with 3AC, Voyager, and Celsius. \u201cIt ONLY survived because it was able to secure funding from FTX using as \u201ccollateral\u201d the 172M FTT that was guaranteed to vest 4 months later.\u201d That\u2019s an extremely risky move. It almost seems like FTX didn\u2019t have a choice.<\/p>\n 8\/ The Alameda bailout likely put a dent on FTXs balance sheet to the point where it was no longer solvent.<\/p>\n This would have been fine if the price of FTT didn’t collapse and a bank run ensued<\/p>\n This is why Alameda tried their best to protect FTT’s price.https:\/\/t.co\/nX1tphjLNR<\/a><\/p>\n \u2014 Lucas Nuzzi (@LucasNuzzi) November 8, 2022<\/a><\/p>\n\n They didn\u2019t, because \u201cthe FTT ICO contract vests automatically. Had FTX let Alameda implode in May, their collapse would have ensured the subsequent liquidation of all FTT tokens vested in September.\u201d If the scenario the Coin Metrics analyst poses is real, SBF and company had to do it. And they paid a heavy price for it. \u201cThe Alameda bailout likely put a dent on FTXs balance sheet to the point where it was no longer solvent. This would have been fine if the price of FTT didn\u2019t collapse and a bank run ensued.\u201d<\/p>\n In this scenario, CZ And Binance somehow found out about the deal. And the biggest cryptocurrency exchange by trading volume had a heavy FTT bag. \u201cAs part of Binance\u2019s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT),\u201d CZ tweete<\/a>d when he announced they were liquidating their position. <\/p>\n What did this heavy FTT bag mean? The Coin Metrics analyst explains, \u201cAs large holders of FTT, they could start deliberately tanking that market to force FTX to face a liquidity crunch.\u201d<\/p>\n And they did.<\/p>\n And then, Binance offered to buy FTX and relieve them of their problems.<\/p>\n Presumably for pennies on the dollar.<\/p>\n A master stroke by CZ and team, if true.<\/p>\n But remember the Coin Metrics\u2019 analyst warning, \u201cImportant to note that this is my own personal highly-speculative take on what happened based on these on-chain artifacts.\u201d Don\u2019t go around saying this is exactly what happened, because it might not be.\u00a0<\/p>\n Featured Image by Gerd Altmann<\/a> from Pixabay<\/a> | Charts by TradingView<\/a><\/p>","protected":false},"excerpt":{"rendered":" <\/p>\n Did this Coin Metrics analyst uncover the key to the whole Alameda\/ FTX story? Because let\u2019s face it, it doesn\u2019t make sense. Both of Sam Bankman-Fried\u2019s businesses were extremely profitable. FTX was the world\u2019s third-biggest exchange and growing, why would anyone risk killing that golden goose? There must have been an underlying cause. Did this Coin Metrics analyst uncover it in the on-chain data? He might have.<\/p>\n The Head of R&D at Coin Metrics, Lucas Nuzzi, ends his thread<\/a> with a warning: \u201cImportant to note that this is my own personal highly-speculative take on what happened based on these on-chain artifacts.\u201d The case the Coin Metrics analyst is making rests on solid on-chain data, but the interpretation of what said data means is \u201chighly-speculative.\u201d So, take it with a grain of salt and don\u2019t go around saying this is exactly what happened, because it might not be.\u00a0<\/p>\n That being said, yikes!\u00a0<\/p>\n Lucas Nuzzi starts with a statement of fact, \u201cI found evidence that FTX might have provided a massive bailout for Alameda in Q2 which now came back to haunt them.\u201d And then, he poses a mystery. \u201c40 days ago, 173 million FTT tokens worth over 4B USD became active on-chain.\u201d Where did those tokens go? You guessed it, Alameda Research. The day was September 28th. A record-breaking $8.6B in FTT moved that day.<\/p>\n 2\/ That day, September 28, over 8.6 Billion USD worth of FTT was moved on-chain.<\/p>\n That was by far the largest daily move of FTT in the token’s existence and one of the largest ERC20 daily moves we ever recorded at Coin Metrics. pic.twitter.com\/GnUO1ZcCB7<\/a><\/p>\n \u2014 Lucas Nuzzi (@LucasNuzzi) November 8, 2022<\/a><\/p>\n \u201cThat was by far the largest daily move of FTT in the token\u2019s existence and one of the largest ERC20 daily moves we ever recorded at Coin Metrics,\u201d Nuzzi tweeted. What was happening around Alameda and FTX near that time? Nothing special, really.<\/p>\n On August 24th, Sam Trabucco stepped down from the Co-CEO position at Alameda Research. \u201cI will stay on as an advisor, but otherwise will not continue to have a strong day-to-day presence at the company,\u201d Trabucco tweeted<\/a>. If all of this is true, that last SBF tweet will probably make an appearance in court.<\/p>\n FTT price chart for 11\/09\/2022 on FTX | Source: FTT\/USD on TradingView.com<\/a><\/p>\n Believe it or not, the FTT tokens came directly from the original ICO smart contract. The Coin Metrics analyst \u201cfound a peculiar transaction that interacted with a contract from the FTT ICO. This 2019 contract *automatically* released 173 Million FTT from the token\u2019s ICO.\u201d Strange, but both organizations are joined at the hip. There might\u2019ve been legitimate reasons.<\/p>\n Then, things took a bizarre turn. \u201cAlameda then sent that *entire* balance to the address of the deployer (creator) of the FTT ERC20, which is controlled by someone at FTX.\u201d<\/p>\n WHAT?<\/p>\n 4\/ The recipient of the $4.19 B USD worth of FTT tokens was no one but Alameda Research!<\/p>\n So what? Alameda and FTX were intrinsically connected from day 1 and Alameda obviously participated in the FTX ICO.<\/p>\n But what happened next was interesting\u2026<\/p>\n \u2014 Lucas Nuzzi (@LucasNuzzi) November 8, 2022<\/a><\/p>\n \u00a0<\/p>\n According to Lucas Nuzzi, Alameda Research wasn\u2019t immune to the crypto contagion that plagued the space in Q2. In fact, the company might\u2019ve blown up with 3AC, Voyager, and Celsius. \u201cIt ONLY survived because it was able to secure funding from FTX using as \u201ccollateral\u201d the 172M FTT that was guaranteed to vest 4 months later.\u201d That\u2019s an extremely risky move. It almost seems like FTX didn\u2019t have a choice.<\/p>\n 8\/ The Alameda bailout likely put a dent on FTXs balance sheet to the point where it was no longer solvent.<\/p>\n This would have been fine if the price of FTT didn’t collapse and a bank run ensued<\/p>\n This is why Alameda tried their best to protect FTT’s price.https:\/\/t.co\/nX1tphjLNR<\/a><\/p>\n \u2014 Lucas Nuzzi (@LucasNuzzi) November 8, 2022<\/a><\/p>\n They didn\u2019t, because \u201cthe FTT ICO contract vests automatically. Had FTX let Alameda implode in May, their collapse would have ensured the subsequent liquidation of all FTT tokens vested in September.\u201d If the scenario the Coin Metrics analyst poses is real, SBF and company had to do it. And they paid a heavy price for it. \u201cThe Alameda bailout likely put a dent on FTXs balance sheet to the point where it was no longer solvent. This would have been fine if the price of FTT didn\u2019t collapse and a bank run ensued.\u201d<\/p>\n In this scenario, CZ And Binance somehow found out about the deal. And the biggest cryptocurrency exchange by trading volume had a heavy FTT bag. \u201cAs part of Binance\u2019s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT),\u201d CZ tweete<\/a>d when he announced they were liquidating their position. <\/p>\n What did this heavy FTT bag mean? The Coin Metrics analyst explains, \u201cAs large holders of FTT, they could start deliberately tanking that market to force FTX to face a liquidity crunch.\u201d<\/p>\n And they did.<\/p>\n And then, Binance offered to buy FTX and relieve them of their problems.<\/p>\n Presumably for pennies on the dollar.<\/p>\n A master stroke by CZ and team, if true.<\/p>\n But remember the Coin Metrics\u2019 analyst warning, \u201cImportant to note that this is my own personal highly-speculative take on what happened based on these on-chain artifacts.\u201d Don\u2019t go around saying this is exactly what happened, because it might not be.\u00a0<\/p>\n Featured Image by Gerd Altmann<\/a> from Pixabay<\/a> | Charts by TradingView<\/a><\/p>\n <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-11574","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/11574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=11574"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/11574\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=11574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=11574"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=11574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Coin Metrics Analyst Makes The Case<\/h2>\n
\nOn September 27th, Brett Harrison stepped down<\/a> from the CEO position at FTX. \u201cOver the next few months I\u2019ll be transferring my responsibilities and moving into an advisory role at the company,\u201d Harrison tweeted<\/a>.
\nThis one is the kicker. On September 28th, Sam Bankman-Fried tweeted<\/a>, \u201cHeads up: rotating a few FTX wallets today (mostly non-circulating); we do this periodically.\u00a0 Might be a few more coming, won\u2019t have any effect.\u201d<\/p>\nSo, What Did Alameda Do With The Money?<\/h2>\n
The Coin Metrics Analyst\u2019s Theory<\/h2>\n
This Is Where CZ And Binance Come In<\/h2>\n
The Coin Metrics Analyst Makes The Case<\/h2>\n
\nOn September 27th, Brett Harrison stepped down<\/a> from the CEO position at FTX. \u201cOver the next few months I\u2019ll be transferring my responsibilities and moving into an advisory role at the company,\u201d Harrison tweeted<\/a>.
\nThis one is the kicker. On September 28th, Sam Bankman-Fried tweeted<\/a>, \u201cHeads up: rotating a few FTX wallets today (mostly non-circulating); we do this periodically.\u00a0 Might be a few more coming, won\u2019t have any effect.\u201d<\/p>\nSo, What Did Alameda Do With The Money?<\/h2>\n
The Coin Metrics Analyst\u2019s Theory<\/h2>\n
This Is Where CZ And Binance Come In<\/h2>\n