FTX Exchange

FTX is a Bahamian cryptocurrency exchange. FTX is incorporated in Antigua and Barbuda and headquartered in The Bahamas. As of February 2022, the exchange has over one million users. FTX operates FTX.US, a separate exchange available to US residents.

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.

In the last 24 hours, the Cryptocurrency market has been accompanied by a heavy price crash. This price crash is so similar to the Terra Collapse days and LUNA crash.

The biggest price correction is related to the FTT token,

FTT token has decreased in price by more than 90% at the time of this writing! its price has decreased to $2, Almost the equal price of its launch time !!!

Due to the severe liquidity problems of the FTX, this exchange starts to sell supporting currencies such as (WBTC, ETH...) in order to prevent further loss of its own token FTT, and this has increased the selling pressure in the market...

Methodology

In yestrday’s Dashboard, I have analysed the flow of Stablecoins from/to FTX and Alameda Research and also analysed the destination of these outflow transfers. You can see my analysis on this link ()

Now in this dashboard, I am going to:

• Analyse the activity of all assets (stablecoins + nonstablecoins) flow on FTX exchange specifically since 7th November (1 day before the main price crash) and also the destination of outflows.
• Check the assets balance of FTX exchange wallets and their changing over time during past 30 days and currently.
• Analyse which assets had the most inflow / outflow to/from FTX.
• Analyse the Inflow to the Binance exchange during this timespan.
• Analyse the activity of Outflowers from FTX and their popular destinations and most emitted events.

I am going to specifically analyse data on Ethereum chain. So, The main table that I am going to use for this analysis are ethereum.core.ez_token_transfers and ethereum.core.dim_labels and

ethereum.core.fact_event_logs.

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).==

So, It seems Statr Xu Star Xu (OKX Exchange Founder) prediction is about to come true since the FTX is becoming another LUNA ! ==>

Summary and Conclusion

• There is an increasing outflow of all assets especially stablecoins from the FTX exchange in recent days.
• The majority of transfers for all assets are to the Binance exchange.
• Most number of outflowers have interacted with contracts such as USDC, USDT, Uniswap, BUSD, Shiba Inu, 1inch Exchhange, Chainlink, HashFlow Token and similar destinations (majority of them are other tokens) after removing their fund from the FTX exchange.
• The highest ouflow from the FTX exchange happened around 6:00 AM on 8th November.
• The wallet balance of the FTX exchange has decreased dramatically over time, especially on its stablecoins which are almost zero!
• currently, the most token held in the FTX exchange is FTT.
• FTT token price has decreased dramatically equal to its launch date’s price (~$2).
• FTX and FTT are very close to become anyother Luna and Terra as Star Xu (OKX Founder) has predicted.
• These events have made Cryptocurrency market to crash heavily.
• BNB token is currently the only token which is holding its price and not going down even after market crash.
• 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 **

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 and is now almost Zero !

The majority of current FTX wallet balance is FTT (FTX Token) with more than 65% share of assets and tokens such as stETH, PAXG, BOBA and others are on the next ranks with very high difference.

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!)

Binance has announced the full acquisition of the FTX exchange

After the events of the past few days and especially yesterday, the users also panics and has a strong fear of having the FTX exchange face the bank run phenomenon (when a large number of customers They want their assets and want to take them out of the platform). As a result, FTX is moving to the limit of emptying liquid assets (quick liquidity). The managers of FTX are trying to get help from Binance to save them, for now, CZ has given the initial agreement and the market has reacted positively (just for a while) to this initial agreement (not finalized yet at the time of this writing).

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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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. its price has experienced significant rise for a while (more than 15% in less than 4 hours) after announcement of Binance will to take full acquistion of the FTX Exchange.

Since 7 November and only in less than 2 days, there was 1.75B USD inflow and 1.94B USD outflow to/from FTX exchange. So, the total net flow is -196M USD which is too bad for this exchange.

Moreover, we can see majority of inflow and outfflow from this exchange belong to the stablecoins. the net flow of both stablecoins and non-stablecoins is negative.

Based on the above charts, USDC and USDT has by far the most both inflow and outflows to/from FTX exchange since 7th November and the 3rd and 4th ranks belong to the FTT and BUSD tokens.

On the other hand, we can see USDT, USDC, BUSD and FTT tokens (the same 4 top outflowed assets from FTX) are assets with the most inflow to the Binance exchange during the same timespan.

According to the above charts and as mentioned earlier, the majority of Outflows and Inflows from/to FTX exchange since 7th November are stablecoins. the share of stablecoins in these flows is almost 4x more than non-stablecoins.

Based on the above charts, the majority of Outflows from FTX has happened on 8th November, around 6:00 AM UTC time with total 221M USD outflow from this exchange which is a huge amount! the activity of outflow and inflow from this exchange has decreased dramatically (almost zero) after 12:00 PM and seems there are some halts on deposit/withdrawal of the assets on FTX exchange.

On the other hand, we can see quite increasing trend of Inflows to the Binance since 7th November and especially during late hours of 8th November. Around 18:00 PM on 8th November there was more than 497M USD to Binance exhcnage which is a quite high amount !

On the above charts, we can see the high activity of outflow wallets from FTX exchange during this timespan and on the other hand, the Inflow wallets to the Binance is very high.

And on the above charts, we can see inflow/outflow and net flow of different asset types (stable or nonstablecoins) on FTX exchange during this timespan. As we see, the huge spike around 6 AM 8th November is because of Non-Stablecoins outflow from FTX. But totally, the share of Stablecoins on these charts is way more than non stablecoins.

On the above charts, we can see the Net flow of assets from/to FTX exchange has decreased dramatically since start of the day 8th November and its getting more and more negative as time goes on.

Same as previous analysis of Stablecoins, we can see Binance is by far the most popular outflow destination of assets from FTX exchange.

As we see, since start of the day 7th November till 8th November Noon, Binance was by far the most popular destination of Outflows from FTX exchange. But after this timespan, we can suddenly see decreasing share of this exchange and on the other hand, increasing share of other destinations such as MEV bot, Coinbase Exchange and Uniswap DEX over time.

Based on the above charts, After transferring out the assets from FTX exchange, USDT, and USDT tokens contract are by far the most popular interacted contract of Outflowers from FTX exchange. But, we can see some other destinations such as Uniswap DEX, BUSD, FTT token, Sandbox Token, Shiba Inu, Chainlink, 1inch Exchange, HashFlow Token and many other destinatinos (majority of them are other tokens) on the list of top popular interactec contract by outflowers from FTX exchange.

And according to the above charts, Transfer and Approval and Swap Events are the most emitted events by the recently outflowers from FTX after transfering their asset out of this exchange.

After the first agreement of FTX and BNB, which is not binding for Binance, Binance undertakes to pay all the assets of the users of the FTX exchange, and in return this exchange is sold to Binance. With the announcement of this news, the cryptocurrency market was in a big shock because before the announcement of this news, SBF and CZ were fiercely fighting each other, and CZ had dealt a big blow to FTX by announcing the sale of Binance's FTT tokens. After announcing this news, the FTT token rose to $21.

15-minute celebration! while everything seemed to calm down the market and even the token of the Binance exchange BNB jumped by 23% to the $400 mark! But with the negative reaction of the activists to this action of Binance, as well as comments from the legislators that this agreement is illegal based on the antitrust principle that prohibits big competitors from supporting each other, the market fell more strongly than before! Bitcoin fell to $17,000 and FTT token fell to $2.

because of the important role of FTX in the Cryptocurrency market, including investment in numerous projects and also a significant asset of various tokens, including Solana (SOL), we had to wait and see the role of this exchange and the agreement What will it look like with the Binance exchange? If the FTX exchange cannot somehow find a way to pay its obligations, it seems that we have to wait for another domino of bankruptcy in the world of digital currencies!

Update 9 November: Death of FTX and FTT ?!

seems Binance is not going to buy FTX and CZ also advise traders to do not trade FTT token. After this announcement, FTT token’s price has fell down again and seems FTX and Sam Bankman-Fried are in a such a huge problem.

on the right, You can see the list of tokens which SBF and FTX and Alameda research have instested on the more than others. So, there is risk of high fell-down price for these assets as we see SOL is already dropped down to the $16 !(at the time of this writing)