Nansen Report Suggests Deep Link Between FTX Fall and Terra Crash

• FTX’s plan to keep Alameda afloat began to unravel around the time TerraUSD crashed.
• At least $5 billion of Alameda’s assets were discovered to be FTX Tokens.

According to Nansen, a blockchain analytics business, there was never a clear separation between FTX and Alameda Research, and FTX’s plan to keep Alameda afloat began to unravel around the time TerraUSD crashed.

Although it has been little over a week after the collapse of the interconnected companies, the failure is still having widespread repercussions in the crypto realm. On Thursday, Nansen released a thorough examination of on-chain data.

The Nansen team reported 

“Piecing together the pieces from our on-chain investigation, it was evident that the Luna/Terra collapse revealed a deep flaw between Alameda and FTX’s muddled relationship. There were significant FTT outflows from Alameda to FTX around the Terra-Luna/ 3AC situation.”

FTT Stockpile by Alameda

Before FTX’s launch in May 2019, wallets belonging to Alameda Research, the quantitative trading desk co-founded by Sam Bankman-Fried in 2017, were engaging with wallets managed by FTX.

At least $5 billion of Alameda’s assets were discovered to be FTX Tokens (or FTT) two weeks ago, making a large percentage of its holdings completely untradeable. After hearing the news, many FTT owners quickly cashed out their tokens and withdrew funds from the FTX market. In the wake of the collapse of an acquisition agreement with Binance, FTX has filed for Chapter 11.

Despite claims in business documentation that it would possess just half of the 350 million supply, the Nansen study indicated that FTX really owned around 80%. However, this put Alameda in a “gordian knot,” since the company was unable to unload substantial volumes of its FTT stockpile without causing the price to plummet.

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