SBF's Alameda Moved $89 Million Worth of Crypto Into a New Wallet
In the past 24 hours, Alameda Research has moved $2.7 million worth of Serum, FTX, and Uniswap tokens into a wallet where the now-bankrupt trading desk has amassed $89 million worth of assets, according to on-chain data.
As of this writing, none of the wallets—all labeled as belonging to Sam Bankman-Fried’s crypto trading firm Alameda Research by blockchain analytics firm Nansen—have tried to move the funds since yesterday.
The transactions are just the most recent unexplained transfers by wallets belonging to Alameda Research following the Chapter 11 bankruptcy filing of FTX Group, which includes FTX.com, West Realm Shires (the parent company of FTX U.S.), and Alameda Research.
On Saturday, Alameda Research moved $36 million worth of funds—$31 million worth of BitDAO tokens (BIT), $5 million worth of SushiBar tokens, and $1 million worth of Render tokens.
Alameda purchased 100 million BIT tokens last year from BitDAO, the decentralized autonomous organization that was founded last year by Singapore-based exchange Bybit and backed by Peter Thiel, the Thiel-founded Founders Fund, Pantera Capital, and Dragonfly Capital.
Alameda used FTT to purchase the BIT tokens and, as part of their agreement, the organizations agreed that neither would sell the other’s tokens before November 2024. Earlier this month, BitDAO demanded that Alameda prove it hadn’t liquidated the tokens after BIT suddenly dropped 20%. Now, all 100 million of the BIT tokens appear to be in the wallet where Alameda has been transferring funds from its other wallets.
Alameda, founded in 2017 by Bankman-Fried and Tara Mac Aulay, is a quantitative trading firm and the sister company to FTX. Bankman-Fried founded FTX in 2019 but didn’t step back from the day-to-day at Alameda Research until July 2021. When he did, Caroline Ellison and Sam Trabucco were appointed co-CEOs. Trabucco stepped down in August, saying on Twitter that he couldn’t “personally continue to justify the time investment of being a central part of Alameda.”
Although Bankman-Fried maintained that Alameda Research, the trading desk, and FTX, the exchange, were separate entities, a leaked balance sheet has shown that Alameda was heavily dependent on being able to borrow customer assets from FTX.
The bulk of the assets in the wallet where Alameda has been sending funds consisted of $32 million worth of Tether and the $31 million BIT on Monday morning. Yesterday, the firm also tried to move $1.7 million worth of Ethereum from four separate wallets, but Etherscan says that the transfers failed because the wallets didn’t have enough funds to cover the gas.
Gas is the fee the Ethereum network charges in order to process transactions. Because crypto transactions don’t go through third parties, like banks or credit card companies, people sending funds pay network validators directly for processing their transactions. Those gas fees vary depending on how busy the network is or how quickly the sender wants the funds to reach their destination.
For example, when one of the Alameda Research wallets tried to move 936 ETH, worth approximately $1 million at the time, Etherscan shows the gas fee on the failed transaction would have been 46 gwei. That’s fractions of a penny (one gwei amounts to one-billionth of 1 ETH).
The wallet should have had enough ETH to cover it, but users are able to specify how much they’re willing to pay towards gas for a transaction. So it could hypothetically be the case that whoever controls that Alameda Research wallet didn’t want to pay 46 gwei to move the funds.
Adam Landis, the attorney representing FTX Group in its bankruptcy proceedings, did not immediately respond to a request for comment from Decrypt.
FTX has been under a lot of scrutiny for its on-chain activity since Friday, when the exchange and 134 other entities filed for bankruptcy. But hours later, $650 million worth of funds left wallets controlled by FTX in what it said were “unauthorized” transactions.
“Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian,” Ryne Miller, FTX General Counsel, wrote on Twitter in a statement from FTX CEO John Ray. “As widely reported, unauthorized access to certain assets has occurred.”
2/ Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian. As widely reported, unauthorized access to certain assets has occurred.— Ryne Miller (@_Ryne_Miller) November 12, 2022
Since then, Bahamian authorities have said they did not order FTX to allow withdrawals from Bahamian users, as the exchange previously claimed on Twitter. On Thursday, after withdrawals had otherwise been disabled for all users, millions started moving off the exchange.
The Securities Commission of The Bahamas said on Thursday that it froze FTX’s assets and asked the Supreme Court to appoint a liquidator. By Saturday, after the unauthorized transactions, the Bahamas Police announced that they were investigating potential “criminal misconduct.”
Trouble started for FTX when a report surfaced showing that at least $5 billion of Alameda Research’s $14 billion balance sheet was in FTT, the utility token used to get discounts on trading fees on FTX’s crypto exchange. Both FTX and Alameda were founded and are owned by FTX CEO Sam Bankman-Fried, but he has always maintained that the two entities were separate.
Apart from the revelations about FTT, Alameda’s balance sheet also revealed that most of the company’s assets were held in highly illiquid tokens, such as Serum—the native token of the Solana-based decentralized exchange founded by Bankman-Fried.
The news prompted Binance to announce that it would be liquidating its FTT position, worth $580 million at the time. The news rattled investors, who withdrew billions from FTX over the course of 48 hours. Eventually, FTX ran out of funds to honor withdrawals and announced that Binance had expressed its intent to acquire FTX. But within a day, that deal fell apart and on Friday FTX filed for bankruptcy.Source