A wallet belonging to Alameda Research, the quantitative trading desk of now-bankrupt FTX Group, sent $17 million worth of USDC to institutional crypto trading platform FalconX on Friday afternoon.
First, a wallet labeled as Alameda Counterparty: 0xe31 by blockchain analytics firm Nansen sent $17 million USD Coin (USDC) to an Alameda Research wallet, 0x600, around noon Eastern Time on Friday. Within two minutes, the USDC was sent to a wallet that Nansen has labeled as Falconx: 0x115.
It’s unclear why Alameda Research would be sending funds to a FalconX wallet. Funds are meant to be frozen once a company files for bankruptcy. But in an affidavit filed in court yesterday, newly appointed FTX CEO John J. Ray III wrote that FTX has “secured only a fraction of the digital assets” that it believes it owns and is working to track down the rest.
FTX Group, which includes Alameda, crypto exchanges FTX.com and FTX US, and more than 130 other entities, filed for bankruptcy on November 11.
But this isn’t the first time funds moved out of Alameda or FTX wallets after the bankruptcy filing. Ray noted in his affidavit that, on the same day FTX filed for bankruptcy, $372 million worth of funds were moved out of its wallets in what the company says were unauthorized transactions.
Now, Ray believes at least some of those funds were transferred at the direction of Bahamian officials.
“[There is] credible evidence that the Bahamian government is responsible for directing unauthorized access to the Debtors’ systems for the purpose of obtaining digital assets of the Debtors—that took place after the commencement of these cases,” Ray wrote in the court filing.
Earlier this year, institutional crypto trading platform FalconX doubled its valuation to $8 billion after raising a $150 million Series D round of funding from GIC and B Capital. In 2021, the company raised $210 million. And so far, the company seems to be relatively unscathed by FTX’s collapse.
FalconX CEO and co-founder Raghu Yariagadda said on Twitter that FalconX has no exposure to Genesis, which itself said it has $175 million worth of funds stuck on FTX and suspended withdrawals on its platform yesterday citing “unprecendented market turmoil.”
Last week, the primary FalconX Twitter account said it has “no exposure to Alameda and small exposure to FTX” relative to its balance sheet.
2/ As one of the largest market participants, we’ve worked with most major liquidity sources, including Alameda and FTX. We have no exposure to Alameda and small exposure to FTX relative to our balance sheet, which remains very strong and liquid.
— FalconX (@falconxnetwork) November 10, 2022
Other on-chain data shows that Alameda has sent $3.6 million worth of Game of Gods (GOG), Covalent Query Token (CQT), ETH, Render (REN), FTX Token (FTT), and Polygon (MATIC) tokens to a multi-signature WalletSimple account over the past couple days.
The multi-sig wallet, so named because multiple people need to authorize transactions, has so far accumulated $94.5 million since it started transacting on the Ethereum network on November 12. It’s the same wallet to which Alameda sent $89 million worth of crypto over the weekend.
It’s possible, but not yet confirmed, that the multi-sig wallet is where Alameda is pooling its funds as it undergoes restructuring. But there are still other transactions that aren’t sending funds to the multi-sig.
The 0xe31 wallet, labeled as an Alameda counterparty by Nansen, sent the company’s 0x600 wallet $57 million USDC on Tuesday, according to Etherscan data. A few hours later, the 0xe31 counterparty received $55.1 million USDC from another common Alameda counterparty wallet, 0xadd. Then, on Wednesday, 0xadd sent $60 million USDC back to the Alameda counterparty wallet, 0xe31, and received another $56.7 million from it hours later.
It’s still unknown why Alameda wallets have transferring large amounts of USDC back and forth with their counterparties, a pattern which has been showing up in on-chain data since last week.