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Blockchain analytics firm Nansen says there was never a clear delineation between FTX and Alameda Research and that the company’s strategy to keep Alameda afloat began to unravel at the time of the collapse. from TerraUSD.

The company released a lengthy analysis of the on-chain data on Thursday, just over a week after the intertwined entities collapsed – with the failure still reverberating widely across the crypto sphere.

“Pulling together the pieces of our on-chain investigation, it was evident that the Luna/Terra collapse exposed a deep flaw between Alameda and FTX’s muddled relationship,” the Nansen team wrote. “There have been significant FTT outflows from Alameda to FTX around the Terra-Luna/3AC situation.”

Wallets owned by Alameda Research, the quantitative trading desk co-founded by Sam Bankman-Fried in 2017, interacted with what would later become FTX-controlled wallets before FTX began operating in May 2019.

“Although relatively small in volume (~$160,000), this strongly suggests that either Alameda was heavily involved in the creation of FTX, or there was no clear separation between Alameda and FTX at the time,” said writes the team in its blog post“and maybe even both.”

Questions about the amount of money flowing between the two companies ultimately led to their downfall.

It became clear two weeks ago that at least $5 billion of assets on Alameda’s balance sheet were FTX, or FTT, tokens, and much of its assets were illiquid. Within days, the news prompted many FTT holders to withdraw their tokens and others to withdraw their deposits from the FTX exchange. After Binance failed to acquire FTX, FTX filed for bankruptcy.

The Nansen analysis also revealed that FTX controlled approximately 80% of FTT supply, despite company documents saying he would only hold half of the 350 million offer. But that left Alameda in what analysts describe as a “Gordian knot” as the company could not sell large amounts of its FTT reserve without driving the price down.

Instead, on-chain data suggests Alameda was taking out loans against its Genesis FTT in September 2021.

Genesis has since confirmed that it has “significant exposureto FTX, but did not comment on any of the theories that he was a major Alameda lender. On Wednesday, the company suspended customer withdrawals, citing “unprecedented market turbulence.”

Nansen analysts speculate that Alameda would have had few options to repay the recalled loans after Terra’s collapse and instead borrowed from FTX. On-chain data shows that at the time Terra lost its peg and wiped out $40 billion, there was a $4 billion influx of FTT from Alameda to FTX.

“Based on the data, Alameda’s total $4 billion FTT outflow to FTX in June and July could have been the provision of collateral that was used to secure the loans (worth at least $4 billion) in May/June which was revealed by several people close to Bankman-Fried in a Reuters interview,” Nansen wrote in his report.

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