FTT has almost no organic demand, with a fraction of the volume and active addresses as comparable crypto tokens like $LINK.

Alameda finds themselves in the same position. They hold more FTT on their balance sheet than tokens currently in circulation, according to market aggregators:

But Celsius couldn’t afford to keep buying the token. The price collapsed. The flywheel spun in reverse, shredding their balance sheet. Creditors are stuck with hundreds of millions of CEL. Selling even a small fraction will crash the market to $0. dirtybubblemedia.substack.co…

CEL token is a great example. Celsius bought tens of millions of the token to keep the price high, enabling them to score a $750 million investment. dirtybubblemedia.substack.co…

Flywheel schemes enable firms to mark their illiquid token holdings to market value. Throw in a little market manipulation, and you can generate billions in assets. At least, on paper. In reality, these tokens cannot be monetized because the markets are so distorted!

The firm’s solvency rests on crypto tokens issued by related parties. This might sound familiar, because this is the same model used by Celsius Network and many other crypto firms to spin billions of dollars in assets out of thin air. We call this the “flywheel scheme:”

A recent report from Coindesk showed that Alameda’s balance sheet is dominated by holdings of FTX’s FTT token. An additional undisclosed amount was held in other tokens from SBF’s other projects. Our sources indicate these holdings are worth several hundred million dollars.

NEW: “IS ALAMEDA RESEARCH INSOLVENT?” According to a recent leak, the firm’s finances rely on the same scheme that destroyed Celsius Network. Will it work out differently for SBF? 🧵👇 dirtybubblemedia.substack.co…