According to the “On-Chain Analysis: The Collapse of Alameda and FTX” report released by Nansen, FTX and Alameda have been closely linked from the beginning. FTX’s platform currency, FTT, has involved Alameda since the first day it was created. The two monopolize the majority of tokens in the total supply of FTT, which never actually enters the circulating market.
The initial success of Alameda, FTX, and the rapid rise of FTT have all likely boosted the value of assets on Alameda’s balance sheet. The FTT positions therein were likely used by Alameda as collateral for borrowing. If the borrowed funds are used in illiquid investments, FTT will be a major weakness for Alameda. With the collapse of Terra/UST in May, a liquidity crunch ensued, with many creditors starting to call in their loans after the collapse of 3AC and Celsius.
Alameda needs funding sources that are still willing to originate loans with existing collateral to provide liquidity. Alameda deposited approximately $3 billion worth of FTT on FTX, most of which was held until after the event.