Twitter Bots Exert Significant Influence on FTX-Listed Altcoins, Allegedly Implicating Alameda Research and FTX Executives in Insider Trading Scandal
According to a report released by the Network Contagion Research Institute (NCRI), Twitter bots played a pivotal role in shaping the market chatter surrounding five FTX-listed altcoins, which were traded by the quant trading firm Alameda Research, led by Sam Bankman-Fried. The NCRI, known for its expertise in cyber security and social media threats, unveiled that this “inauthentic chatter” on Twitter had a substantial impact on the prices of the aforementioned tokens, particularly those held by Alameda insiders.
The five coins affected by the orchestrated bot-driven activity were BOBA, GALA, IMX, RNDR, and SPELL. Following their official listing on FTX, fake tweets pertaining to these tokens surged, resulting in price increases of up to 30% in some instances. Remarkably, these “inauthentic” comments eventually constituted almost half of all Twitter posts concerning the tokens.
The NCRI report shed light on the suspicious pattern of account creations and bot-like activities, suggesting a deliberate effort to manipulate market sentiment and trading behavior associated with these tokens.
Interestingly, Alameda Research was found to have possessed at least five of these tokens before their listing on FTX. This raised further concerns as a previous report by compliance firm Argus had already disclosed instances of Alameda Research employees leveraging insider information to generate substantial gains of $60 million from various tokens, including IMX, ahead of their listings on the FTX exchange.
Adding to the complexity of the situation, a CoinDesk report last fall revealed unusually close ties between Alameda Research and FTX, and subsequent investigations pointed to the involvement of Alameda executives in FTX’s alleged misappropriation of user funds.
Among the tokens held by Alameda, Render (RNDR) displayed significant price surges, ranging from 11% to 30% within a 24-hour period on four separate occasions between 2022 and 2023, according to the data analyzed by NCRI.
NCRI’s comprehensive analysis encompassed over 3 million tweets mentioning 18 tokens that were publicly listed on FTX and directly promoted by the exchange’s official Twitter account from January 1, 2019, to January 27, 2023. Notably, nearly one million of these tweets specifically referred to six tokens highlighted in the report, which includes the five tokens held by Alameda.
Sam Bankman-Fried now faces federal securities and wire fraud charges, with a trial scheduled for October. Additionally, he is confronted with a lawsuit from the Securities and Exchange Commission (SEC).
In summary, the NCRI report raises serious questions about the influence of Twitter bots on the prices of FTX-listed altcoins and implicates Alameda Research and FTX executives in potential insider trading practices, adding another layer of complexity to the ongoing scrutiny of the cryptocurrency market.
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