Sam Bankman-Fried through FTX Precipitated Celsius and 3AC’s Bank-Run

On 6th of August 2022, two mystery wallets withdrew $75M+ of stETH from FTX. They then proceeded to market-sell everything, kicking off a “de-peg” event seen as one of the contributing factors to Celsius’s bankrun and the demise of Three Arrow Capital [3AC].

We know today as per revelations emanating from FTX Implosion that Sam Bankman-Fried and Alameda Research was behind these sales prompting the winding off of Celsius and 3AC.

The stETH depeg event of last year led to a significant stress in the Crypto market, and many rumors of Celsius liquidity problems created holes for Institutional Investors. Celcius announced just four days after the Alameda stETH sales, that it was halting withdrawals. Alameda Research was suspected of playing a role in the June depeg but there wasn’t much verifiable proof onchain.

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Alameda Reservation previously doxxed wallets publicly withdrew liquidity and sent stETH to FTX. Many sharp traders like HsakaTrades had their suspicions.

Nansen also reported on these wallets as contributing to the depeg, but wasn’t able to identify them or their intention. Today we can be certain that Alameda/SBF owned them. These mysterious wallets both recently sent ETH and stETH to the FTX Estate in January.


Whilst stETH is strictly speaking, not required to trade on par with ETH, many players had build up leveraged stETH-ETH positions on Aave which puts them at risk of liquidation if the price ratio deviates too much from the 1:1 “peg”

  • Our on-chain investigation revealed that contagion stemming from the de-peg of UST and subsequent collapse of the Terra ecosystem was likely the main factor for stETH deviating away from this 1:1 ratio
  • As stETH cannot be redeemed for ETH until after the Merge, the primary way to obtain liquidity on large stETH positions is through Curve
  • Large quantities of stETH (in the form of bETH) which were deposited in Anchor were almost entirely bridged back to Ethereum mainnet in a matter of days, increasing the selling pressure and causing uncertainty among participants
  • During the Terra collapse (May 7-16), the main liquidity pool on Curve lost more than half its TVL (3AC and Celsius alone withdrew almost $800m combined), resulting in a classic “liquidity crunch” as reflected in the pool’s imbalance which left the stETH price “vulnerable”

Given the poor market backdrop post-Terra’s collapse, both pool imbalance and liquidity on Curve for stETH failed to recover; the drying up of liquidity meant that there was no other avenue for significant stETH holders such as Celsius to cover their positions, culminating in the widely publicized events that occured on June 11-13.

Alameda took seven figures in slippage in the largest single swap of a crypto trade I’ve ever seen them do on chain. There were certainly savvy enough to understand the slippage impact which makes me think they had motives outside of best-price execution.

Alameda Research could have processed this trade OTC on behalf of Celsius last year or another big party. Not sure this makes sense given;

A. stETH inflows into FTX were all Alameda that week. Celsius only deposited ~$5M of stETH into FTX AFTER the depeg ?

B. What kind of OTC slippage is that?

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