New Study Suggests FTX and Alameda Research Potentially Employed Social Media Bots for Crypto Market Manipulation

Latest Study: Twitter Bot Accounts Possibly Influenced Digital Asset Prices on FTX Crypto Exchange and Alameda Research Hedge Fund

New Study by Network Contagion Research Institute (NCRI) Investigates Potential Twitter Bot Influence on FTX Crypto Exchange and Alameda Research Hedge Fund

The NCRI conducted extensive research, analyzing over three million tweets from January 1, 2019, to January 27, 2023, mentioning 18 cryptocurrencies that were once listed on the now-defunct FTX exchange.

The study sheds light on FTX's former head, Sam Bankman-Fried's recognition of Twitter's significant impact on crypto prices. Bankman-Fried's acknowledgment of how social media hype could overshadow intrinsic value, leading to inflated market capitalizations, indicates a clear awareness of Twitter's role in the cryptocurrency market.

The study raises questions about the possibility of FTX engaging in a Twitter scheme to manipulate crypto markets. The researchers found that bot-like tweets seemed to affect token prices, prompting an inquiry into whether coordinated inauthentic activity was used to artificially inflate market values.

NCRI's findings suggest that the increased social media activity was not merely an organic response to the coins' popularity but possibly a strategic ploy to influence market sentiment. Surprisingly, the study reveals that tweet volumes didn't just impact price variations; they were also influenced by the reverse effect.

NCRI researchers note that "inauthentic, bot-like comments" about the 18 tokens surged after FTX's official promotion of the digital assets. Some of the cryptocurrencies involved include Render (RNDR), The Sandbox (SAND), Immutable (IMX), and Gala (GALA).

The study highlights that bot activity appeared to rise following FTX's promotion, indicating a possible catalyst for attracting inauthentic amplification. While listing on FTX increased overall chatter for each coin, the proportion of inauthenticity in this chatter significantly grew over time.

Amidst these developments, Sam Bankman-Fried faces multiple charges related to the November collapse of FTX, including allegations of customer fraud and mismanagement of billions of dollars in funds.

Aug 04, 2023