Not Your Keys
Introduction
FTX is a centralized exchange for digital currencies. The exchange was founded in 2019 and as of February 2022 had over one million users. FTX has become one of the largest exchanges with high turnover in this field during the three years of its existence. In the past days, there were rumors about the bankruptcy of this exchange. A sharp drop in the price of the token related to this exchange, namely FTT, confirmed these rumors, and then this exchange faced a sharp drop in the value of assets and liquidation, which led to the bankruptcy of this exchange.
If your crypto is stored in a wallet you don’t have the private keys for, like a wallet on an exchange, is it really yours? Many will say it isn’t. This idea is encapsulated in one of the crypto world’s most famous mantras [RefA]:
> “Not your keys, not your coins.”
During the FTX bankruptcy, this adage became true. As a centralized exchange, FTX holds the users' assets and takes full ownership of them. If such events happen to the exchange, users are forced to withdraw capital from it. In this article, we are going to examine the process of capital withdrawal from FTX on Ethereum during its critical days. Also, we will also analyze the trend of inter-network transfers on Axelar Satelite in these days. \n
Axelar Bridges
In this section, we are going to examine inter-blockchain transfer transactions. Satellite is a system that allows its users to transfer their tokens between different blockchains. The level of activity of this system on the days related to the fall of FTX can be of special importance.
First, we will have a general look at the level of activity of this system. We have depicted the number of daily transactions of this system in the chart below. We have also presented the average number of daily transactions and the average volume of transfers that are carried out on a daily basis in this system.
Key Findings
- The volume of transfer transactions increased significantly in the days after the FTX crisis, and this high volume continued until the 10th of November.
- The daily volume on the peak days, i.e. November 9, has reached four times the daily average.
- The number of daily Axelar transactions has also increased significantly during the critical days of FTX, and on the 9th of November, the number of transactions has increased to twice the daily average.
- Ethereum and Polygon have been the most important destination blockchains for Axelar transfer transactions.
- USDC is the most important token transferred in Axelar. It can be said that about 90% of the transfers were related to this token. Secondly, Ethereum is another important token that is transferred in Axelar transfer transactions.
Conclusion
In this dashboard, we examined the trend of the fallout of FTX from the point of view of the incoming and outgoing flows of this exchange. We also examined the changes in the activity of Axelar as an inter-blockchain transfer platform in the days related to the FTX crisis.
The amount of cash outflow of this exchange had increased in the days before the announcement of bankruptcy, which shows the impact of rumors on the fear of users and the withdrawal of their capital. The most important destination of users after the withdrawal of capital from FTX was personal wallets, which shows the decrease of users' trust in centralized exchanges in order to keep capital. During the critical days of FTX, we saw a significant increase in the volume of Axelar transfer transactions. The most important token that was moved in transfer transactions was USDC and the most important destination blockchains were Ethereum and Polygon.
Key Findings
- From the beginning of November, money has been withdrawn from the FTX exchange. Even before the official announcement of FTX bankruptcy, users have started withdrawing capital. This issue was probably due to the existence of rumors about FTX, which led to the fear of the users of this exchange.
- The volume of cash outflows peaked on November 6th, and after a few days of heavy cash outflows, this trend has stopped.
Definitions
Axelar
Axelar provides a decentralized network and tools that help connect dApp builders with multiple blockchain ecosystems, applications, and users for frictionless cross-chain communication. Axelar consists of a protocol suite, tools, and APIs, designed to break down the barriers to cross-chain communication [RefC].
Centralized Crypto Exchange (CEX)
A centralized crypto exchange (CEX) is a business that provides you with a multitude of services such as a crypto trading platform (buy and sell transactions), account services (account funding and withdrawal), and customer support services. Centralized exchanges remain the most widely used method to buy and sell crypto. They are attractive to many crypto users since they are considered to be more convenient and easier to use than a decentralized exchange (DEX). [RefB].
Satelite
Satellite is a web application built on top of the Axelar Network. It provides an easy to use interface which enables users to transfer their crypto assets from one chain to another [RefD].
FTX Cash Flow
In this section, we evaluate the incoming and outgoing flow of cash to the FTX exchange on the Ethereum network. For this purpose, we have considered all transfer transactions. If a transfer transaction has been made to the FTX destination, we consider it as an incoming transaction. If a transfer transaction takes place from the origin of FTX to another destination, we consider it as cash outflow from FTX.
Since various tokens have been transferred on Ethereum from/to FTX, in order to aggregate them and provide an overall statistic, we have considered the value of all transfer transactions in dollars at the daily price and a dollar amount for each day. We have reported that it shows the daily value of all tokens that have been transferred.
In order to examine the impact of the FTX fallout on liquidity, we have considered the 6th of November as the day when the FTX crash began. We specify this day in the charts to see its effect on the cash flow changes. First, in order to have a general view, we check the volume and number of outgoing transactions from FTX on Ethereum. The following charts show the volume and number of transfer transactions originating from FTX for the current month.
References
[RefA] [RefB] [RefC] [RefD]
Please check out this dashboard on Twitter:
Key Findings
Other means addresses that have not been tagged. These addresses are mainly related to personal wallets. Considering that the most popular destination address is related to this type, it can be said that after the fall of FTX, most users have decided to transfer their assets to personal and safe wallets.
The second most popular destination for users has been the Binance exchange, to which the most transfers have been made.

In addition, the charts below have divided and depicted the daily inter-blockchain transfer volume based on different tokens.
In the graphs below, we have depicted the volume of transfer transactions carried out on Excellar. Since the transfer of various tokens is done on Axelar, we have considered the dollar value of each token on the transfer day as the volume. The graphs below show the transfer volume in Excel in the days of the current month. This chart breaks down the volume based on the destination blockchain. A normalized graph is also provided for better comparison.
Also, the volume of incoming and outgoing liquidity to FTX is presented in the time charts below. For a better comparison, the volume of incoming and outgoing liquidity is also plotted in normalized form.
In this section, we evaluate the intentions of the outgoing transactions from FTX. In the graphs below, we have drawn the most important destinations that have had transfer transactions from FTX.


The following chart shows the total cash flow of incoming and outgoing. Negative values in this chart indicate that the output volume exceeds the input volume.