Crypto broker Alameda Research, owned by FTX founder Sam Bankman-Fried, saw nearly $370 million transferred to the exchange this week.

On-chain data company PeckShield marked a series of transactions between Alameda and FTX, where the broker moved several tokens including BUSD, USDC and ETH to the exchange’s wallet.

While it was not immediately clear what the purpose behind the trades was, they came after FTX rescued at least two major cryptocurrency lenders.

The exchange has provided lines of credit totaling more than $700 million to Voyager Digital and BlockFi. Both lenders faced a liquidity crisis amid a severe drop in crypto prices.

FTX wants to prevent contamination

Founder Sam Bankman-Fried said in a recent interview that the exchange – which is one of the largest crypto players – has a responsibility to “prevent contagion”. But the move also gives FTX a much bigger stake in the crypto market, with the Voyager deal reportedly making Fried the company’s largest shareholder.

Fried is also a 7.6% stake in Robinhood trading app, which has a recent but sizeable presence in the crypto industry.

FTX’s bailouts follow a potential insolvency in crypto hedge fund Three Arrows Capital (3AC), to which Voyager and BlockFi were both exposed. Concerns about contagion from the insolvency have spread across the market, causing crypto prices to plummet.

But while Fried has attributed the crypto market weakness to Federal Reserve rate hikes, there appear to be more factors at play.

Alameda behind market weakness?

Much of 3AC and cryptocurrency lender Celsius’s insolvency risks stem from weakness in Lido Staked Ethereum (stETH) prices.

Both 3AC and Celsius had used the token as collateral and when prices fell, they were exposed to margin calls that they could not deliver. This in turn liquidated their positions and dumped tokens into the market.

But sETH weakness coincided with Alameda swapping about $57 million of the token on Curve, creating an imbalance in the liquidity pool and denting the peg of the token to Ethereum.

FTX CEO Fried has denied speculation on the matter, calling it a “dumb conspiracy theory.”

With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]

The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

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