Alameda Research Moves $370 Mln To FTX, More Bailouts Incoming?

Crypto dealer Alameda Analysis, which is owned by FTX founder Sam Bankman-Fried, was seen transferring almost $370 million to the trade this week.

On-chain information agency PeckShield flagged a series of transactions between Alameda and FTX, the place the dealer moved a number of tokens, together with BUSD, USDC and ETH to the trade’s pockets.

Whereas it was not instantly clear what the aim behind the transactions was, they arrive after FTX bailed out no less than two main crypto lenders.

The trade has provided credit score strains totalling over $700 million to Voyager Digital and BlockFi. Each the lenders had been dealing with a liquidity crunch amid a extreme drop in crypto costs.

FTX needs to stem contagion

Founder Sam Bankman-Fried stated in a recent interview that the exchange- which is likely one of the largest crypto players- has a duty to “stem contagion.” However the transfer can be giving FTX a a lot bigger stake within the crypto market, with the Voyager deal reportedly making Fried the biggest shareholder within the agency.

Fried can be a 7.6% stakeholder in buying and selling app Robinhood, which has a latest, however sizeable presence within the crypto business.

FTX’s bailouts come on the heels of a possible insolvency in crypto hedge fund Three Arrows Capital (3AC), which Voyager and BlockFi had been each uncovered to. Issues over contagion from the insolvency have unfold throughout the market, bringing down crypto costs.

However whereas Fried has attributed the crypto market weak spot to rate of interest hikes by the Federal Reserve, there seem like extra elements at play.

Alameda behind market weak spot?

A bulk of 3AC, and crypto lender Celsius’ insolvency dangers stem from weak spot within the costs of Lido Staked Ethereum (stETH).

Each 3AC and Celsius had used the token as collateral, and when its costs fell, they had been uncovered to margin calls they might not meet. This in flip liquidated their positions, dumping tokens into the market.

However stETH weak spot coincided with Alameda swapping about $57 million of the token on Curve, inflicting a liquidity pool imbalance and denting the token’s peg to Ethereum.

FTX CEO Fried has denied hypothesis over the matter, calling it  a “dumb conspiracy theory.”

With greater than 5 years of expertise protecting international monetary markets, Ambar intends to leverage this data in the direction of the quickly increasing world of crypto and DeFi. His curiosity lies mainly find how geopolitical developments can affect crypto markets, and what that might imply in your bitcoin holdings. When he is not trawling by means of the online for the newest breaking information, you will discover him enjoying videogames or watching Seinfeld reruns.
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