Market chatter from on-chain researchers involved with Solana and Ethereum blockchains suggests that FTX might be benefiting from funds that have moved out of the Wormhole protocol within the last few days. Wormhole is a popular Ethereum-Solana bridge championed by Jump Crypto and Sam FTX’s Bankman-Fried.
The current rumors are frothy given the high level of media interest in the solvency of FTX and its associated market-maker and prop shop, Alameda Research. Researchers have posted some on-chain receipts that they claim indicate that FTX or its principals may be pulling assets out of Solana’s Wormhole protocol to make sure it has enough to cover its liquidity needs.
Protos hasn’t been able to corroborate this research, noting in particular that there are hundreds of wallets associated with FTX, Wormhole, and Alameda Research.
I hear FTX is selling #SOL to maintain #FTT above $22.— Duo Nine | discord.gg/ycc (@DU09BTC) November 7, 2022
As soon as SOL is moved, FTT pumps. Curious.
Anyone got more intel? 🧐 pic.twitter.com/PyJhNs4EK2
FTX and Alameda Research could be facing a potential liquidity issue due to an upswing in customers withdrawing funds. Binance’s Changpeng Zhao (CZ) indicated that his company is selling millions of dollars worth of FTX’s exchange token, FTT. CZ cited “recent revelations that have come to light,” though he didn’t specify further.
Read more: How the battle between Binance and FTX went from bad to worse
CoinDesk recently published details regarding Alameda’s June 2022 balance sheets. In June, the company had $14.6 billion in assets and $8 billion in liabilities, yet its assets were highly leveraged to FTT. Its assets included a staggering $3.66 billion worth of FTT and $2.16 billion in FTT collateral. Liabilities included $292 million in locked FTT.
Alameda’s ledger also includes $292 million in unlocked SOL, $41 million in SOL collateral, and $863 million in locked SOL.
Some FTX customers have complained of issues with withdrawing funds from FTX on its official Telegram channel. They said they had to wait several hours for their transactions to move past ‘pending’ status.
Sam Bankman-Fried has been a prominent supporter of Solana since its early days. He previously claimed that Solana could handle mass adoption and called it an underrated asset. He blew off past incidents like a massive exploit of the Solana-dominant Wormhole bridge as well as Solana’s frequent blockchain outages.
CoinDesk’s revelations, plus CZ’s public comments about liquidating Binance’s sizable FTT holdings, could have incited panic from FTX’s creditors or customers. Any kind of bank run-type situation could require a lot of transactions that could as easily clog up exchanges as cause issues for the price of FTT.