Crypto data analytics firm CoinMetrics traced Alameda’s blockchain transactions in an attempt to answer the question on everyone’s mind – where did the money go

In a Nov. 22 report, CoinMetrics said that they discovered that the lines between Alameda and FTX were blurred due to the ownership of the exchange’s native token FTT 

The analysts hypothesized that Alameda’s large FTT position was used as collateral for a large loan from FTX, some of which may have been the exchange’s user funds. 

CoinMetrics found that Alameda wallets deployed a massive sum of funds in the last quarter of 2021 when the crypto market was at its peak. Between September and November, Alameda’s aggregated outflows amounted to $22 billion, said the analysts. Of these funds, $13.8 billion was in ERC-20 transfers and $9 billion was in ETH transfers.

“In our view, the timing and magnitude of funds deployed leading up to the market peak partially explains why Alameda would incur enormous losses as the crypto market collapsed over the first half of 2022,” said CoinMetrics.

The analysis shows that Alameda deployed $7.8 billion to DeFi lending protocols, $4.6 billion to DeFi LP and farming protocols and $4.4 billion to non-FTX exchanges.

“It’s truly astonishing: Alameda was involved in everything from DeFi borrowing and lending to cross-chain bridges across many different ecosystems,” tweeted Lucas Nuzzi, head of research at CoinMetrics.

Nuzzi believes that Alameda may have lost a large chunk of user funds in early 2022 through directionally wrong trades, DeFi lending markets and cross-chain bridges that were hacked or lost value.

CoinMetrics also found outflows in various stablecoins that summed up to $27 billion. Based on the sheer size of these ouflows, analysts believe there was high leverage involved with the firm using illiquid crypto assets to collateralize debt.

They also theorized that some funds may have been siphoned off-chain in light of FTX Chapter 11 Bankruptcy filings that revealed billions of dollars were loaned to FTX executives. 

“It’s possible that funds were also used to prop up FTT’s price starting in early 2022 when it outperformed several other similar tokens,” said Nuzzi, highlighting that the token became central to both Alameda and FTX’s survival.