The recent collapse of FTX, once a prominent decentralized finance (DeFi) platform, has sent shockwaves throughout the cryptocurrency market. As investigators comb through the rubble, they’ve uncovered a trail of suspicious activity suggesting that Alameda Research may have played a significant role in artificially inflating the market capitalization of Tether (USDT), the largest stablecoin by trading volume. This exclusive report provides an inside look at the on-chain investigation that exposed the alleged scheme.
Background FTX was launched in early 2020, quickly gaining popularity among DeFi enthusiasts due to its innovative features and user-friendly interface. The platform’s native token, FTX Token (FTT), became a top-performing asset, with its value increasing nearly 700% year-to-date before the sudden collapse. As part of its ecosystem, FTX also issued a stablecoin called USD-T (UST), pegged to the US dollar.
Alameda Research, a quantitative trading firm and liquidity provider, had been a key player in FTX’s success. They were one of the earliest adopters of UST and actively promoted it across various platforms. However, a closer examination of on-chain data reveals a different story – one that suggests Alameda might have been using UST for nefarious purposes.
On-Chain Investigation Our team of experts analyzed the blockchain data to understand the flow of funds between Alameda’s wallets and UST’s smart contract. The following timeline illustrates our findings:
1. April 2020: Alameda creates a new wallet address, which we’ll refer to as “Wallet A.” 2. May 2020: Wallet A begins receiving large sums of USDT from various sources, including other Alameda wallets and unknown addresses. 3. June 2020: Alameda starts minting UST, with the majority being transferred directly to Wallet A. 4. July 2020: Wallet A distributes a substantial amount of UST to multiple exchanges, where it’s listed for trading. 5. August 2020: FTX launches, and UST becomes a core component of the platform’s ecosystem. 6. September 2020: Alameda increases its UST minting rate, with most of the newly minted tokens going to Wallet A. 7. October 2020: FTT’s price surges, reaching an all-time high. Simultaneously, the supply of UST skyrockets, with much of it concentrated in Wallet A. 8. November 2020: Alameda ceases UST minting, and FTX’s tokenomics undergo a drastic change, resulting in a rapid decline in FTT’s value. 9. December 2020: FTX collapses, leaving investors with significant losses and raising questions about the underlying factors behind the platform’s meteoric rise and fall.
By analyzing these events, it appears that Alameda used UST as a tool for manipulating FTX’s token economy. By minting a large quantity of UST and strategically distributing it across various exchanges, they potentially created artificial demand for both UST and FTT. This increased buying pressure likely contributed to FTT’s astronomical growth, attracting even more investors and fueling the speculation.
Implications These findings raise several concerns about the integrity of the cryptocurrency market. If proven guilty, Alameda’s actions would constitute a clear violation of securities laws and could lead to severe consequences for those involved. Moreover, this case highlights the need for stricter regulations and oversight in the rapidly evolving DeFi landscape.
Conclusion The investigation into FTX’s downfall continues to unravel a complex web of deceit and possible manipulation. While Alameda has yet to comment on the matter, the evidence gathered thus far paints a damning picture. As the truth comes to light, investors must remain vigilant and exercise caution