$1m crypto mystery loan to Alameda Research

November last year was a shocking time for the crypto industry. FTX, an enormous crypto exchange founded by Sam Bankman-Fried, and an associated crypto hedge fund called Alameda Research had collapsed, prompting investors to look around in fear at which company might topple next.

Robbie Ferguson, co-founder and president of Australia’s largest crypto start-up, the blockhain gaming company Immutable valued at $3.5 billion, had a reassuring message. “Immutable does not hold any funds on FTX, nor has lent Alameda or FTX any assets,” Ferguson posted on social media on November 12.

There’s no suggestion Ferguson was wrong, but the broader picture is more complex. A Cayman Islands foundation linked to Immutable had loaned Alameda 10 million digital tokens, variously valued between $US800,000 ($1.1 million) and $US1 million.

Ferguson’s older brother James, Immutable’s chief executive, is one of three directors of the Cayman Islands entity, which is called the Digital Worlds Foundation.

The foundation, which is a non-profit that supports the tokens behind several Immutable projects, has not revealed the reason for the loan.

In its annual report to the Australian Securities and Investments Commission, Immutable disclosed that one of its key events in the last financial year was that it “advised and assisted the Digital Worlds Foundation Group of entities on the successful sales and launches” of three tokens.

The tokens are for Immutable X, a piece of blockchain technology built by Immutable; its premier game Gods Unchained; and a coming game to be published by Immutable called Guild of Guardians. Tokens for that last game were loaned to Alameda.

There is no suggestion of wrongdoing by the foundation, Immutable or their employees and the loan is worth very little compared with the assets of either the foundation or Immutable.

But the transaction shows Alameda’s reach in the crypto industry at the height of the bubble in 2021 and early 2022. At that time, firms such as Alameda were promising huge returns to investors but many ultimately failed to deliver.