FTX, Binance, and Alameda Research

Binance is the most important crypto trading market (exchange) by volume, but it has suffered real scandals in recent years. For example, cryptocurrency thefts, the last of which – last October – has caused the theft of 570 million dollars in cryptocurrencies.

FTX is the third largest exchange in the world by volume. Its CEO, Sam Bankman-Fried, had previously run a cryptocurrency trading company called Alameda Research. Recently a CoinDesk report revealed how Alameda's wallet was mostly based on FTT, the token created by FTX. That dependency was suspicious and raised eyebrows in the crypto industry and its investors.

That data has generated a lot of complaints and criticism among investors, who now seem to be withdrawing their positions from FTX. And while Binance CEO Changpeng Zhao (CZ) has entered into an exchange of comments with Sam Bankman-Fried. Binance had FTT among its assets, announcing that “due to recent revelations that have come to light, we have decided to liquidate any FTT that was still on our books.”

Main Takeaways

• In the span of a week, the Stablecoin balance of the FTX hot wallets has decreased by more than 90%.
• After the rumors appeared on November 6th, the number of wallets withdrawing and the number of withdrawals greatly increased. That is, until not too long ago, when withdrawals were frozen.
• Binance, Bitfinex, and Kraken are the exchanges that have received the most stablecoins following FTX’s downfall.

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November 8th, 2022

Ethereum: Stablecoin Flows to/from CEXs

Key Findings:

• After the rumors appeared on November 6th, the number of wallets withdrawing and the number of withdrawals greatly increased. That is, until November 8th at 10am UTC, when withdrawals were frozen.
• In the last week, more than $1.37B worth of tokens have been withdrawn from FTX.
• Binance is the exchange receiving the most stablecoins.

Key Findings:

• In the span of a week, the Stablecoin balance of the FTX hot wallets has decreased by more than 90%, and the stablecoins held by FTX are at all time lows
• (hiding Binance and Bitfinex) We can see that the Stablecoin balance for FTX has decreased from $800M at the beginning of the month to now $16M.
• In contrast, the cumulative inflow/outflow for binance is of about $1.5B worth of stablecoins.

Solana: Stablecoin Flow to/from CEXs

In the case of Solana, we show the token flow data for USDC, USDT, BUSD, and DAI, therefore, the visualizations will refer only to stablecoin activity.

Key Findings:

• In Solana, FTX has lost about $120M worth of Stablecoins in the last 7 days. It seems that Kraken has received a significant Stablecoin inflow.

• The deposit/withdrawal activity is the same as that observed on Ethereum, only with less volume and fewer transactions. Ethereum is where most of the FTX holdings are and where most of the activity seems to take palce.

Dashboard Objectives

The purpose of this dashbaord is therefore to study the inflows and outflows of Stablecoins of the Hot Wallets of the main exchanges, both in Ethereum and Solana. In the former, we include Binance, Bitfinex, Coinbase, Crypto.com, Kraken, Kucoin, Huobi, and FTX. In the latter we show all those that are labeled in the Flipside data.

We show the data relative to the Stablecoin flows in terms of:

• CEX Transfer Senders/Receivers: Number of users sending stablecoins to CEX wallets or receiving stablecoins from them.
• CEX Inflow/Outflow Transactions: Transactions with stablecoins being sent to or from a CEX wallet.
• Stablecoin Holdings: USD value of stablecoins held daily by each exchange.
• Cumulative Inflow/Outflow: Net flow of stablecoins on each CEX.

We show all these metrics for the last 7 days, given that the events concerning FTX’s solvency started to be discussed on November 6th.

Methodology

The CEX wallets can be easily identified from the label = ‘cex’ in the dim_labels table for both Ethereum and Solana.

To get information on the inflows and outflow, we use the data from the ez_eth_transfers and ez_token_tranfers, finding those that correspond to the CEX wallets.

Balances for the Ethereum wallets have been obtained from the ez_balance_deltas table, such that the changes in token balance can be aggregated to obtain the daily wallet balance.