Ailing Alameda
Analyze what Alameda is experiencing. Rumors over the weekend began swirling that alameda research is on the brink of insolvency. Observe net in and outflows of USD tokens from known Alameda or FTX accounts throughout different chains. Are they going somewhere specifically? Are there any signs of potential insolvency?
Alameda Research
Alameda Research Ventures (ARV) is a multi-stage crypto and fintech investment firm with a mission to take a pragmatic, real-world oriented approach to finance - making it more accessible for all.
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Sam Bankman-Fried (SBF)
Sam Bankman-Fried, also known by his initials SBF, is an American entrepreneur and one of the richest people in crypto thanks to his FTX exchange and Alameda Research trading firm. He is CEO and Founder of FTX and also Alameda Research. The son of two Stanford law professors, he studied physics at MIT but was drawn to "effective altruism," the utilitarian-inflected notion of doing the best possible.
What is The Story ?
In the past few days, after a report from CoinDesk about the strange financial balance sheet of Alameda was published, we have seen some important events and some have sounded the alarm that Alameda and even FTX exchange can shock the market with its bankruptcy. Now I am going to briefly review these events:
- CoinDesk report publication: Alameda's financial statement shows that the company's assets are 14.6 billion dollars, the highest amount of which is 3.66 billion dollars of FTT token (the native token of the FTX exchange) which is unlocked. But the main point is that the source of the company's 8 billion dollar loan has not been determined, and it is also not known how much of it is without support.
- Sam Bankman-Friend response: After many criticisms following the publication of this report, finally, SBF, the CEO of FTX, was forced to respond and claimed that this company has more than 10 billion dollars of capital not mentioned in this report. But it still did not specify how much of Alameda's loans were made through FTX.
- Sale of FTT by Binance: Binance CEO Changpeng Zhao also confirmed the rumors about the sale of FTT token by this exchange, and said that this action was aimed at reducing the risk of the assets of this exchange. In response, SBF trivialized this decision and said that FTX is ready to buy all Binance’s FTT tokens. CZ stated that he will sell the remaining FTT token holding. He added that this move is a part of his exit plan from FTX.
- Liquidity problem: Following the spread of this news, withdrawals from the FTX exchange have intensified, and Alameda has been forced to transfer assets from his accounts in other exchanges to the FTX exchange in order to provide the necessary liquidity.
- Huge capital outflow: To understand the dimensions, it is enough to mention that the FTX exchange's Ethereum balance has decreased by 300 thousand in the past 48 hours!
Looks like FTT players are selling this token heavily!
Where is the hidden point of the story? The FTX exchange creates its multi-billion dollar token from scratch. It brings a segment into the cycle that Binance and competing exchanges buy. Puts a part in Alameda as collateral to get a dollar loan; Magic trick !
Since yesterday, a large amount of this token has entered Binance and the sales pressure has increased so much that this price drop increases the possibility of liquidating loans with FTT collateral. Unless the FTX exchange starts buying. These tricks will ultimately harm the people who have put their small capital on this token.
Binance Moves to Liquidate FTX Token Holdings
While the famous CZ did not state how much FTT will be sold, it’s known that Binance received roughly $2.1 billion worth of BUSD and FTT as part of its FTX exit last year.
SBF tweeted at Zhao and proposed a buyout at $22 per token as a way not to greatly impact the markets.
When it comes to money movements, a $583 million transfer (in FTT) has moved to a Binance exchange wallet over the weekend.
Numerous sources state that FTX’s books are not as good as they seem, and that they might hold too many illiquid assets that might trigger a domino effect if one thing goes wrong.
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In the last 24 hours, the Cryptocurrency market has been accompanied by a price correction.
The biggest price correction is related to the FTT token, and the reason for this drop is the sale of FTT tokens of the Binance exchange, in the amount of 580 million dollars.
FTT token has decreased in price by more than 16% in 1 hour and at the time of this writing, its price has decreased to $15, the lowest price since February 2021 !
On the other hand, currently, BNB (Binance Native Token) is the only one coin standing stable in this STORM. CZ is deploying all funds into BNB that he got by selling FTT.
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Methodology
In this dashboard, I am going to take a look at the stablecoins inflow and outflow from known Alameda or FTX account throught Ethereum and Solana. (I was going to also analyse more chains, but there was not a FTX or Alameda labeled address on those chains,s Dim. Labels tables (BSC, Arbitrum, Optimism, Terra, Algorand, NEAR, Polygon, Avalanche are the chains that I have investigated them but there was not labeled address for FTX & Alameda or there was not any flow on transfers tables to these addresses).
So, The main table that I am going to use for this analysis are ethereum.core.ez_token_transfers and ethereum.core.dim_labels (for Ethereum) & solana.core.fact_transfers and solana.core.dim_labels (For Solana).
For analysing the Outflows, we should set our from_address or tx_from to the extracted FTX and Alameda addresses from dim_labels tables ==while the to_address or tx_to is not FTX and Alameda addresses (excluding inner flows).==
For analysing the Inflows, we should set our to_address or tx_to to the extracted FTX and Alameda addresses from dim_labels tables ==while the from_address or tx_from is not FTX and Alameda addresses (excluding inner flows).==
Moreover, We are just going to analyse stablecoins activity on this bounty. I have extracted the popular stablecoins of each chain from Defillama () and tried to analyse those flows on this analysis but there are only some limited stablecoins on each chain which had out/in flow to/from FTX and Alameda. (BUSD, TUSD, USDT, DAI and USDC for Ethereum) (USDC and USDT for Solana).
Also, I am going to extract the destination of Outflows from these platforms to see if they going somewhere specifically.
The timespan for this analysis is since 30 days ago till today. Also, I have analysed destinations data since 2nd November 2022 specificily (the same time when coindesk article was published and this story was about to begin!)
Some comments from Star Xu (OKX Exchange Founder) about this event and his advises for CZ ==>
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As we see on the above, during the past 30 days, the total net flow of stablecoins from/to FTX and Alameda Wallets is negative which is bad news for these 2 companies. The net flow on Solana chain is even more negative compared to the Ethereum. Also, we can see the inflow and outflow of transfers from/to FTX and Alameda on Solana chain are way more than Ethereum.
On the above charts, we can see the main wave of outflows from FTX and Alameda wallets has started from November and its getting more and more over time. We can see the highest ouflow from these wallets have occurred on yesterday, 7th November (when the war between FTX and Binance has officialy began and Binance (CZ) has started to sell all of its FTT tokens). Only on 7th November, almost 1.5 Billion Dollars were transferred out of these wallets which is quite huge amount.
Moreover we can see the cumulative net flow of stablecoins on both chains before November was almost positive but after November and after the coindesk article and negative news from FTX, we can see a huge decreasing trend of cumulative net flow over time till today. As mentioned before, USDC and USDT have almost the most share of flows in all days on both chains.
On the above charts, we can see the majority of stablecoins outflow from FTX and Alameda on Ethereum have been transfered to Binance (61% of total outflow $volume) during the past 30 days.
The main outflow destinations of stablecoins from Solana chain are Coinbase (in terms of TX count) and Gate.io (in terms of Volume).
So, the majority of stablecoins from FTX and Alameda are being transferred to FTX’s competitors Exchanges.
On the above charts, We can see the destination of each stablecoin outflows from FTX and Alameda wallets on both chains.
On Ethereum, The majority of transfers destinations of all stablecoins is Binance exchange. (for BUSD, the share of Bitso is a little more than Binance).
on Solana, the majority of transfers destinations of both USDC and USDT is to Gate.io exchange.
On the above charts, we can see the daily distribution of popular destinations for stablecoins outflow from Solana and Ethereum over time since 30 days ago.
As we see, on Ethereum, as time goes on and especially during recent week, The share of transfers to Binance is increasing dramatically and the share of this Exchange has reached its highest number on Yesterday and Today.
on Solana, we can see the majority of transfers to Gate.io exchange has happed on the October, but during recent week and on November, we can see huge increasing share of Coinbase exchange and also Huobi and Kraken, on Outflow stablecoins from FTX and Alameda wallets.
And on the left charts, I have brought share of stablecoin outflows transfers from FTX and Alameda since 2nd November.
As discussed before, We can see huge increasing share of Binance (on Ethereum) and Coinbase and Kraken and Huobi (on Solana) as time goes on over time.
Summary and Conclusion
- The stablecoins net flow on Both Solana and Ethereum chain from/to FTX & Alameda wallets during the past 30 days and especially past week is negative.
- The outflow volume from FTX and Alameda wallets has increased dramatically since November 2022, when the war between FTX and Binance was about the begin and the report from CoinDesk about the strange financial balance sheet of Alameda was published.
- USDC and USDT have the highest share of outflows.
- The highest ouflow from these wallets have occurred on yesterday, 7th November (when Binance (CZ) has started to sell all of its FTT tokens). Only on 7th November, almost 1.5 Billion Dollars were transferred out of FTX and Alameda wallets which is quite huge amount!
- Based on the CarlOwOs1 Analysis (#Credit) of FTX balance during the past 30 days, the situation in FTX is really bad! the stablecoins balance of this exchange has decreased dramatically after 6th November! Seems there is a real risk of potential insolvency!
- The majority of stablecoins’ outflow destinations are exchanges such as Binance (on Ethereum), Coinbase, Gate.io, Kraken and Huobi (on Solana).
- The outflow volume from FTX and Alameda to Binance and other exchanges is increasing more and more over time especially during the past week.
- So, There has been a massive decline in stablecoins in FTX and Alameda wallets on both Ethereum and Solana chains especially during recent week.
- After CoinDesk reported on Alameda's strange financial balance sheet (the company founded by FTX CEO SBF), we saw significant developments and some raised the alarm that Alameda and even FTX could , to bring a big shock to the market with their bankruptcy.
- 1.5 months ago, Almeda's CEO resigned. Alameda Research co-CEO Sam Trabucco has stepped down from his role at Alameda Research. Although his reason for quiting was: “I can’t 100% remove myself from crypto without going into withdrawal, so I’ll probably still be around here to some extent,” as he said, but on this week, we can see there are rumors about the bankruptcy of this FTX Trading Company !
- Numerous sources state that FTX’s books are not as good as they seem, and that they might hold too many illiquid assets that might trigger a domino effect if one thing goes wrong.
Discord: Ali3N#8546 Twitter: Alik_110 Tweet Link For This Dashboard:
And on the above charts, we can see inflow, outflow and net flow of each stable coin separately during the past 30 days. As we see, on both chain, USDC is the token with most total outflow and also inflow to/from FTX and Alameda wallets.
Most negative net flow also belong to the USDC token on both chains. Totally, the net flow of all stablecoins during the past 30 days are negative !
Stablecoins Flows From/To FTX and Alameda Wallets
Outflow Stablecoins Destinations from FTX and Alameda Wallets
Now on the above charts, we can see the destination of outflows specifically for after 2nd November (when the war was about to begin).
As we see, on Ethereum, Binance has the most share (higher % share of its % share during the past 30 days) of outflow stablecoin transfers from FTX and Alameda wallets during this timespan.
Also on Solana, We can see the majority of transfers were done to Coinbase and Kraken (Gate.io which had the highest share during the past 30 days, is on the 3rd rank during the past week).
Based on the above charts from CarlOwOs1 Analysis (#Credit) of FTX balance during the past 30 days, we can see the situation in FTX is really bad ! the stablecoins balance of this exchange is decreasing dramatically over time and especially since 6th November! Seems there is real risk of potential insolvency !
Will FTX Survive?
With the worsening situation of this exchange and also the investment company Alameda Research, the question that is being raised is whether FTX will manage to survive this disaster.
Full-scale war between Binance and FTX: Right after Binance announced the sale of FTT tokens, the attack on this exchange increased. As the war between Binance CEO CZ and FTX CEO SBF worsens, many have pointed to the fight between the two since 2021. The interesting thing is that according to published information, a significant inflow to the Binance exchange in the last seven days was from the FTX exchange! This means that FTX users are withdrawing their money from this exchange and entering it into Binance.
FTX assets: The more important question is whether FTX assets are the answer to this crisis or not. To accurately understand this issue, we must have clear information about the assets of this exchange, which unfortunately was not provided by the team, and in the case when CoinDesk published Alameda's balance sheet, this information was read by the team as incomplete, and incorrect. However, perhaps the only information available is the balance in the exchange, for example, the Ethereum balance of this exchange has decreased by 80% in the last 7 days! Regarding the bitcoin assets of this exchange, the conditions are more or less the same and currently its bitcoin balance is reported to be 6,000. (For comparison, this number is 600,000 bitcoins for the Binance exchange!)
Update: seems CZ will be buying FTX!
Chang Pang Zhao Tweeted: This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
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