FTX and Alameda Research's Alleged Interconnection Unveiled

FTX and Alameda Research: A Complex Relationship

A recent report highlights the intricate connections between the now-bankrupt cryptocurrency exchange FTX and the crypto trading firm Alameda Research. Both entities, established by Sam Bankman-Fried, are under scrutiny due to their intertwined operations. The report suggests that these connections date back to their inception, raising concerns about transparency and market manipulation.

Early Liquidity and Token Distribution

On-chain analysis reveals that Alameda Research was one of the first liquidity providers for FTX as early as May 2019. This early involvement appears to have been significant, with Alameda's wallets receiving substantial allocations of FTX's native token, FTT. Of the initial 350 million FTT tokens, 27 million allegedly landed in Alameda's deposit wallet on FTX, representing a significant portion of the token's initial distribution.

Control Over FTT Supply

The report indicates that FTX and Alameda combined controlled approximately 86% of the FTT supply. This level of control left a minimal amount of FTT circulating in the open market, which heightened the risk of price manipulation. The scarcity of freely available tokens could have made the token's price highly susceptible to artificial inflation or deflation.

Implications for Market Integrity

The close relationship between FTX and Alameda Research, as outlined in the report, raises questions about market manipulation and ethical business practices within the cryptocurrency industry. As authorities consider extradition for Sam Bankman-Fried, the findings underscore the need for increased transparency and regulation to protect investors and ensure market integrity.