Nansen, a blockchain analytics firm, has released a report that sheds light on the days leading up to the collapse of FTX, a cryptocurrency exchange founded by Sam Bankman-Fried. The report reveals that the collapse was likely sparked by initial reports that flagged the significant, 40 percent share of Alameda Research’s $14.6 billion in assets held in FTT tokens in Sept. 2022.Nansen analysts 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 as well as a number of continuous transfers of a mix of US dollar stablecoins amounting to $388 million. On-chain data also indicated that FTX held around 280 million FTT (80%) of the total 350 million FTT supply.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. Blockchain data 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 ‘CZ’ Zhao announced that the exchange would offload its tokens following disparaging reports about Alameda’s balance sheet.Nansen’s report suggests that the two companies, FTX and Alameda, controlled around 90% of the FTT token supply and were able to prop up each other’s balance sheets. The report also suggests that the collapse of the Terra/LUNA algorithmic stablecoin and subsequent bankruptcy of 3 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. On-chain data indicates that this may have happened, as Alameda sent ~163m of FTT to FTX wallets, worth ~$4b at that time. This coincides with a $4 billion loan figure that close associates of Bankman-Fried had divulged in an interview with Reuters.

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Information	Details
Geography	Global
Countries
Sentiment	negative
Relevance Score	8
People	Sam Bankman-Fried, Changpeng Zhao, Reuters
Companies	3 Arrows Capital (3AC), Binance, Nansen, FTX, Alameda Research
Currencies	US Dollar, Ethereum, Stablecoin, Bitcoin, FTX
Securities	None