FTT tokens at the center of collapse passed back and forth between the pair even before they were issued, according to research firm Nansen.
Reporting also contributed by Emily Mason
The hedge fund then sent those tokens back to FTX five days later. There are two plausible explanations for those transaction, Nansen’s research found. One is that Alameda was functioning as a market maker for FTT, which began trading at a price of. A more skeptical view, however, would be that the strategy allowed the exchange to dump tokens onto retail customers at an elevated price.
Nansen tracked the inbound flows of 163 million FTT, worth approximately $4 billion based on prices at that time, from Alameda to FTX. Also in mid-June, at the peak of the collapse of Three Arrows Capital, Alameda received a large inflow of FTT from five entities, including cryptocurrency exchange Huobi and Genesis Trading. The significant on-chain transfer volume suggests that Genesis could have been a key lender to Alameda, Nansen says.
According to Nansen, these funds were subsequently transferred to FTX from Alameda in June and July. One plausible explanation why is that these assets were used as collateral against loans taken from customer deposits in other tokens and assets on the exchange. However, Nansen was unable to prove that based on the data.
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