TechFlow news, November 9 — Lucas Nuzzi, Research Director at CoinMetrics, tweeted that there is evidence suggesting FTX may have provided a large-scale bailout to Alameda in the second quarter, and now this is haunting them again. On-chain data analysis indicates that Alameda was on the brink of collapse in Q2 alongside firms like Three Arrows Capital. It survived only by using 17.2 million FTT tokens—guaranteed to vest after four months—as collateral to obtain funding from FTX. Once the tokens vested, they were all returned as repayment.
The FTT ICO contract automatically vests tokens. If FTX had allowed Alameda to implode in May, its collapse would have triggered liquidations of all FTT tokens set to vest in September. That would have been disastrous for FTX, so they had to avoid it at all costs. In effect, Alameda and FTX put all their chips on the table in Q2, using those funds to rescue other entities, reinforcing FTX’s image as a solvent and responsible institution and helping prop up the FTT price. However, this bailout of Alameda may have severely weakened FTX's balance sheet, rendering it insolvent—explaining why Alameda went to such great lengths to protect the FTT price.
Additionally, Nuzzi speculated that Binance insiders might have known about this arrangement between FTX and Alameda. As major holders of FTT, they could potentially be deliberately destabilizing the market to force FTX into a liquidity crunch.
