Curriculum·G101 Querying On-Chain Data·about 30 min
What the chain records, and the run FTX could not hide
By the end of this lesson you can
- →State what a public blockchain records and what it does not, and why that makes it evidence
- →Explain how FTX's concentrated reserves and withdrawal run were readable on-chain before the bankruptcy
- →Compute a reserve concentration from public balances and say what it does and does not prove
- →Decide which questions the chain can answer and which need off-chain information
Graduate · enrolled learners
This lesson opens with FTX and Alameda Research, November 2022.
- What happened
- FTX was one of the largest cryptocurrency exchanges, tightly linked to the trading firm Alameda Research. On 2 November 2022 a leaked Alameda balance sheet showed that much of its assets, about 5.8 billion of 14.6 billion dollars by Nansen's account, sat in FTT, a token FTX itself had issued, and related tokens rather than independent assets. On-chain analysts then read the public wallets directly: FTX alone held about 280 million of the 350 million FTT supply, so the token propping up the balance sheet was one FTX itself controlled, and as confidence broke, a visible outflow of customer assets accelerated into a run over 6 to 8 November: a net stablecoin outflow of 451.1 million dollars in the week to 7 November, and over 6 billion dollars gone in 72 hours. The exchange said it was fine. On 8 November it appeared to pause withdrawals; by 10 November Bankman-Fried was warning investors of a shortfall of as much as 8 billion dollars, and on 11 November FTX filed for Chapter 11 bankruptcy. The addresses, balances and transfers were public the entire time; the collapse was off-chain, but its shadow was on-chain and readable days early.
- The decision point
- The people who read FTX's wallets in early November were not insiders and had no leak beyond the balance sheet that started it. They had a skill: they could ask the public chain what FTX actually held and what was actually moving, and the answers, a self-issued token concentrated in FTX's own hands and an accelerating outflow, contradicted the company's reassurances days before the filing. This is the analyst's first and most important fact. A public blockchain is an immutable record of what moved, held by no one and readable by anyone, so it is evidence in a way a company's statement is not. It does not show intentions, off-chain debts, or private ledgers, and confusing what it does show for the whole truth is its own error. But what it shows, it shows to everyone equally, and learning to ask it is where analysis begins.
- Recorded loss
- $8,000,000,000
What you will be able to answer
- →What did analysts read in FTX's wallets before the collapse?
- →Why is a public blockchain evidence?
- →What can the chain not tell you?
- →What edge did the FTX analysts have?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://nansen.ai/post/blockchain-analysis-the-collapse-of-alameda-and-ftx
- https://www.investopedia.com/what-went-wrong-with-ftx-6828447
- https://rekt.news/ftx-yikes
- https://www.investmentnews.com/alternatives/ftx-hurtles-toward-bankruptcy-with-8-billion-hole/229054
Confidence high·Volatility medium·Reviewed 2026-09-15·Owner unassigned
Contested
The size of the hole is reported differently. Bloomberg, on 10 November 2022, reported Bankman-Fried warning of a shortfall of as much as 8 billion dollars; rekt.news the same day wrote of accusations of a 10 billion dollar shortfall; exact figures shifted through the bankruptcy proceedings and asset recoveries. Nansen's own 8 billion dollar figure is a different number, Alameda's liabilities as reported by CoinDesk, not the customer shortfall.
Nansen documents the readable part: about 280 million of the 350 million FTT supply held by FTX, a net stablecoin outflow of 451.1 million dollars in the week of the run, and the apparent pause of withdrawals on 8 November. It also says the question of whether FTX provided funds to Alameda cannot be conclusively answered by on-chain data alone. The over 6 billion dollars withdrawn in 72 hours is rekt.news's figure, which Investopedia attributes to Reuters.
Nansen's figure is FTX's share of the FTT supply, not a breakdown of FTX's customer reserves by token; that a reserve holding much of its own token is concentrated is the lesson's reading of that share.
This lesson uses FTX for the point that on-chain data is public evidence readable before an off-chain collapse is confirmed; it does not claim the chain alone proved insolvency, which also depended on off-chain liabilities.