📝 Introduction

The recent winter of cryptocurrencies led to a liquidity crisis for some of the biggest companies in the industry. Companies such as Three Arrow Capitals, Celsius and Voyager were among the companies that faced severe liquidity crunch. Due to these reasons, the crypto community was worried that the giants FTX and Alameda Research also faced a liquidity crisis and bankruptcy.

🔸 Why FTX and Alameda Research faced crisis?

On Sunday, November 6th, Changpeng Zhao (CZ), the CEO of the Binance exchange, announced that he will sell all the tokens of the FTX (FTT) exchange. It should be noted that Binance was one of the early investors of FTX exchange and last year after selling its shares, it received 2.1 billion dollars in the form of BUSD (Binance Stablecoin) and FTT token.

CZ said:

After this action of Binance, other companies such as Jump Trading have also joined it. on the other hand, Binance’s decision to sell the tokens prompted an immediate response, with users of FTX rushing to withdraw their funds from the exchange.

On Monday, Sam Bankman-Fried (SBF) hit back at CZ, posting:

> “A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine. FTX has enough to cover all client holdings … I’d love it, [CZ], if we could work together for the ecosystem.”

In response, CZ feigned ignorance, saying that he wrote this "in 5 minutes... and that my tweets were simple." In the meantime, withdrawals continued and on the other hand, the price of FTT fell sharply, until Tuesday morning when FTX stopped processing customers' withdrawal requests for several hours (So on Nov 8, 2022 the FTT price dropped from $22.22 to $3.14, that is, the price dropped by about 86%). But finally at 16:00, SBF conceded defeat.

After admitting defeat to CZ, SBF wrote:

> “Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. we apologize for that. But the important thing is that customers are protected.’’

CZ also said the exchange will try to sell tokens in a way that minimizes market impact, and expects it to "take several months" to complete due to market conditions and limited liquidity. Alameda CEO Caroline Ellison tweeted that the company was willing to buy Binance's FTT tokens at $22 to avoid the market impact of the Binance sale, to which CZ responded, "I think we'll stay open market."

🔸 What was the reason for this action of Binance?

There are controversial reports about the FTX exchange and its sister company, Alameda Research. Both of these companies are owned by Sam Bankman-Fried.

Although both companies have different businesses, Alameda Research's balance sheet reportedly includes a significant amount of the FTT token ($3.66 billion of the company's total assets of $14.6 billion). According to some experts, Alameda Research's funding appears to have been built on the same plan that destroyed the Celsius network.

Cory Klippsten, CEO of Swan Bitcoin, expressed concern over the news that Binance had transferred large amounts of FTT to the exchange. He believed that FTX had major payment problems and considered the exchange technically insolvent. Cory Klippsten noted:

> “the net equity in the Alameda business is actually FTX’s own centrally controlled and printed-out-of-thin-air token.”

For many cryptocurrency traders, this revelation was reminiscent of the collapse of projects such as Terra/Luna, Three Arrows Capital, Fidelity, and Celsius earlier this year.

Lark Davis, a well-known cryptocurrency influencer, also told his followers to withdraw their cryptocurrencies from FTX.

Meanwhile, Sam Bankman-Fried said in one of his tweets that FTX and his other companies are under heavy monitoring and financial audits. He also assured FTX users that there is nothing to worry about and all withdrawals are working fine.

Ethereum Chain

• In the last 30 days, the number of transactions related to the departure of stablecoins from FTX addresses is more than the number of transactions related to the arrival of stablecoins to these addresses.

• On November 7, the number of stablecoins withdrawals from FTX addresses has increased dramatically. On this day, the number of transactions related to the departure of stablecoins from FTX addresses was more than 6 times the number of transactions related to the arrival of stablecoins to these addresses.

• Since November 6, the number of transactions related to the withdrawal of stablecoins from FTX wallets has increased, coinciding with Binance's CEO's tweet about the sale of his own FTT tokens.

• In the first week of November, around $500M USD net has been withdrawn from FTX wallets on the Ethereum network. 😰😱

• The results show that in the last 30 days, the output volume of all stablecoins from FTX wallets was more than the input volume. 😰😱

  🔴 USDC → -203.9M

  🔴 USDT → -75.3M

  🔴 DAI → -3.2M

  🔴 BUSD → -91.9M

  🔴 TUSD → -57.4M

  Likewise, the number of asset withdrawals from FTX wallets has been higher than the number of deposits to these addresses. 😨😨

  🔴 USDC → -20,565

  🔴 USDT → -21,654

  🔴 DAI → -541

  🔴 BUSD → -5,550

  🔴 TUSD → -133

The largest volume of stablecoins withdrawn from FTX wallets has been sent to Binance, Coinbase and Bitfinex exchanges.

Solana Blockchain

• Checking the transactions related to FTX wallets on the Solana network shows that in almost all of the last 30 days, the number of deposits of stable coins to FTX addresses has been higher than the number of withdrawal transactions from these addresses. But in the last month, the amount of stablecoins withdrawn from FTX addresses has been more than the amount of input volume. The net volume of stablecoins exchanged by FTX addresses are:

  🔴 USDC → -464.9M

  🔴 USDT → -121.13M

About $586M USD has been net withdrawn from FTX wallets on the Solana chain in the past month. 🥶😨😰😱

✍🏻 Methodology

• In this dashboard, the following tables are used to extract data:

  • ethereum.core.ez_token_transfers → This table is used to extract data related to transfers of stablecoins. The stablecoins exchanged in these transactions are → symbol='USDC','USDT','DAI','TUSD','BUSD'

  • from ethereum.core.dim_labels → Using this table, addresses related to ftx and Alameda have been called → label='ftx'

  • solana.core.dim_labels → Similar to the Ethereum chain, this table is used to find the volume and number of transfers of stablecoins between FTX addresses and other addresses.

  • solana.core.fact_transfers → Using this table, addresses related to ftx and Alameda have been called → label='ftx'

    FTX addresses on the Solana network have only exchanged USDC and USDT (among different stablecoins) with other addresses.

📃 Purposes of dashboard

In this dashboard we analyzed what Alameda is experiencing. The story started when there were rumors over the weekend that Alameda was on the verge of bankruptcy. To investigate this issue, we analyzed the net inflow and outflow of stablecoins from well-known Alameda or FTX addresses in Ethereum and Solana chains and extracted the most important results or signs from the data.

For a more accurate evaluation, the following metrics are used:

1️⃣ Outflow & Inflow & Netflow Volume/Count

2️⃣ Outflow & Inflow & Netflow Volume/Count based on Stablecoin

3️⃣ Total Transfer Volume of Stablecoins from FTX to CEXs

As mentioned, all the above metrics are reviewed once for the Ethereum blockchain and once for the Solana chain.

💡 Conclusion

In this dashboard, the rumors about Alameda's bankruptcy were discussed. In this dashboard, the incoming and outgoing stablecoins flow from FTX addresses during the last 30 days were evaluated. All the results show that during the last weeks a net total of about 1B USD stablecoins have been withdrawn from FTX wallets on the Ethereum and Solana networks. The result was the withdrawal of capital from FTX addresses, which caused a negative impact on the crypto market and the loss of FTT prices on November 7 and 8.

Analyst: Emanoel

***Twitter: ***

Discord: Eman#9698

Special thanks to the Flipsidecrypto 🧡