94% of Blockfolio Deal Funded in FTT, Token Now Labeled a Security by SEC

  • Documents have shown that around 94% of the $84 million FTX paid to acquire a 52% stake in Blockfolio in 2020 was in its own FTT token.
  • The U.S. Securities and Exchange Commission labeled the token a security in its complaint against former Alameda CEO Caroline Ellison.


Bankrupt cryptocurrency exchange FTX used its own FTT token to fund the takeover of portfolio tracking platform Blockfolio back in 2020, Bloomberg reported on 22 December.

The publication cited financial statements it had reviewed, according to which around 94% of the $84 million Blockfolio deal was paid using FTT — which was created by the FTX exchange — though reports at the time indicated that FTX used a combination of cash, crypto, and equity. Through this deal, FTX was able to obtain a 52% stake in the portfolio tracking platform, and the option to buy the rest of the company within two years.

One of the reasons behind the collapse of FTX was also said FTT token. In early November, a leaked balance sheet of Alameda Research indicated that a large portion of its assets were held in the FTX-issued token, which revealed the close connection between the two companies. Shortly after, Binance CEO Changpeng “CZ” Zhao tweeted that his company will be liquidating all of its FTT holdings, which in turn attracted more attention to the story, and eventually caused FTX to file for bankruptcy.

All of these events forced the Securities and Exchange Commission (SEC), and other U.S. agencies, to finally take a closer look at what was once one of the largest crypto exchanges on the market. The former CEO of FTX, Sam Bakman-Fried, has now been charged with eight counts of customer and investor fraud, as well as campaign finance laws violations.

Today, the SEC also noted that the FTT token was sold as an investment contract and in turn was a “security”. The claim was made in a complaint filed against former Alameda CEO Caroline Ellison, who was not only accused of actively participating in a “multiyear scheme to defraud equity investors”, but also for manipulating the price of FTT by “purchasing large quantities on the open market to prop up its price” between 2019 and 2022.

Related Coverage
Australian Regulator had Concerns Over FTX Months Before Collapse
  • Australia’s financial regulator raised concerns over some products offered by FTX Australia shortly after it began operating in the country.
  • Internal documents show the regulator requested information from the exchange three times, and that FTX Australia was under “surveillance activity” prior to its collapse.
a day ago


FTX’s Creditor List Includes Big Tech, Airlines, Government Agencies
  • Bankrupt crypto exchange FTX has filed a massive 115 page document listing every entity the company owes money to, from Big Tech players to government agencies.
  • The names of close to 9.7 million individual customers were redacted from the document as per Judge John Dorsey’s instructions.
New FTX CEO Considers Restarting the Exchange
  • The new CEO of FTX, John J. Ray III, told the Wall Street Journal that had formed a task force to explore the option of restarting the international exchange.
  • Ray noted he was willing to revive the platform if that could recover more value for the company’s customers than liquidating its assets.