Crypto

Alameda Research’s Assets Reportedly “Entirely Illiquid,” Is All Crypto At Risk?

Alameda Research is on thin ice if we’re to think the current report. Sam Bankman-Fried’s trading company appears to have the majority of its possessions in illiquid altcoins, which is bad enough. Worse even is that the lion’s share of its possessions remains in FTT, the token developed by his derivatives exchange FTX. If that’s true, your house of cards is constructed on unsteady ground. And if something as huge as Alameda Research falls, contagion might impact the entire crypto area. In a huge method.

However, there’s no warranty that this is the entire image. The report originates from “a private financial document reviewed by CoinDesk” and the publication yields “It is conceivable the document represents just part of Alameda Research.” In any case, according to the files, Alameda Research reports $14.6B in possessions and $8B in liabilities.

Alameda Research Is All In On FTT

There’s absolutely nothing incorrect with going all in if the conviction exists. When the financial investment remains in your own token, however, it unlocks to all sort of dangers. The FTT token resembles Binance’s very effective BNB. It’s the FTX environment’s energy token and it provides holders all sort of advantages and discount rates in trading and deal charges. So, FTX continuously presses the FTT token and no one bats an eye.

Noted expert Dylan LeClair even more broke down Alameda Research’s possessions, while commenting: “Most net equity tied in completely illiquid altcoins.” 

  • $3.66B FTT
  • $2.16B “FTT collateral”
  • $3.37B crypto ($292M SOL, $863M “locked SOL”)
  • $134M USD
  • $2B equity securities

Back to the report, Alameda Research’s declared monetary information consist of completely excessive FTT:

“The financials make concrete what industry-watchers already suspect: Alameda is big. As of June 30, the company’s assets amounted to $14.6 billion. Its single biggest asset: $3.66 billion of “unlocked FTT.” The third-largest entry on the possessions side of the accounting journal? A $2.16 billion stack of “FTT collateral.”

There are more FTX tokens amongst its $8 billion of liabilities, consisting of $292 countless “locked FTT.” (The liabilities are controlled by $7.4 billion of loans.)”

Is that an issue? Dylan LeClair puts it into perspective: “The total market cap of FTT is $3.35b, & the fully diluted market cap is $8.8b. You couldn’t sell $1m of this thing without pushing the market significantly lower.” That’s right, they hold the whole future of FTT in their hands. Which is not perfect.

FTT rate chart on FTX | Source: FTT/USD on TradingView.com

Is Alameda Research In Deep Trouble?

If it’s viewpoint you desire, Swan Bitcoin’s Cory Klippsten puts it a lot more eloquently. “It’s fascinating to see that the majority of the net equity in the Alameda business is actually FTX’s own centrally controlled and printed-out-of-thin-air token,” Coindesk estimates him stating. How bad is it for Alameda Research, though? Well, according to LeClair, Alameda Research’s possessions consist of $5.82B worth of FTT, and the token’s existing market cap is $3.35B. Which is not perfect. 

“We don’t have insight into what the liabilities are denominated in. If it’s primarily USD, Alameda is in DEEP trouble. The asset side of their BS is entirely illiquid. If it’s loans denominated in ‘crypto’, it’s better, but still not great,” LeClair tweeted. Then, his criticism reaches brand-new levels as he even more describes the plan. “99%+ of token is held by top 1% of addresses, of which the largest holder is a hedge fund, Alameda Research, who’s VC arm recently merged with FTX.”

If the reports hold true, we may have concentrated on the incorrect issues. Noted expert Cobie goes for the throat, “the funniest part of this to me is not the insanity of Alameda owning almost all of the float of FTT, but it’s that significant assets on their balance sheet include “MAPS, OXY and FIDA.” 

Featured Image by Gerd Altmann from Pixabay | Charts by TradingView

MEV, a pink piggy bank



Michael Evans

Professional writer, editor, and producer with over a decade of experience. I'm an experienced editor who has written for a variety of publications, and I specialize in editing non-fiction articles, news, and business blogs.

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