Original | Odaily Planet Daily (@OdailyChina)
Author｜Nan Zhi (@Assassin_Malvo)
Last week, a lawsuit document from FTX revealed that a Mauritian citizen named Nawaaz Mohammad Meerun (hereinafter referred to as Meerun) extracted $1.2 billion from the FTX exchange and Alameda Research over the course of a year, yet never left conclusive evidence.
Debut: Mysterious whale steals $450 million.
Meerun's first battle occurred in January 2021, when he chose a low liquidity token BTMX as his first target. Over the course of two months, he continuously bought BTMX through the BitMax and FTX platforms, ultimately controlling about 50% of the total supply on the network. Driven by Meerun, the price of BTMX skyrocketed from $0.03 to $3, an increase of 10,000%.
Then Meerun exploited the loophole in FTX's margin trading system, using inflated BTMX as collateral to borrow hundreds of millions of dollars. He then quickly withdrew funds, transferring $450 million to multiple wallet addresses.
The lawsuit states: "Meerun was clearly aware that once his manipulative actions stopped, the price of BTMX would collapse, and he would need to return all 'borrowed' assets. But Meerun never intended to comply with FTX's rules."
Although BitMax warned the FTX team to pay attention to unusual transactions, the FTX management did not take action. The FTX team locked his account but forgot to disable his withdrawal function. After Meerun cashed out, some employees even attempted to shift the loss onto Alameda Research to cover up the incident.
Alameda became Meerun's ATM.
After successfully manipulating BTMX, Meerun did not stop there. Instead, he turned to a different strategy—shorting. He targeted another obscure token, Mobile Coin (MOB).
Meerun first established a short position of about 10% of the total supply of MOB on FTX, which Alameda was later forced to bear. To compensate for the short position, Alameda purchased a large amount of the token.
The price of MOB skyrocketed 750% during several weeks of Alameda's buying spree, rising from $8 to $68, with Alameda paying a significant premium. However, after Alameda slowed its purchases, the price rapidly plummeted. Ultimately, this transaction resulted in Alameda losing about $1 billion, while Meerun once again successfully cashed out.
In August 2021, Meerun reportedly used new accounts and aliases to implement a similar manipulation scheme with low liquidity tokens such as BAO, TOMO, and SXP, profiting nearly $200 million before FTX caught on.
KNC Incident: Last Attempt, Failure (or not?)
After multiple successes, Meerun once again targeted the KNC token. He meticulously set up a complex account structure, using stolen or forged KYC materials, false addresses, and non-existent postal codes to open FTX accounts. He also established 64 sub-accounts under the main account to circumvent FTX's collateral restrictions.
He then bought another low liquidity token KNC in large quantities, simultaneously purchasing through multiple accounts to drive up the price, ultimately controlling about 70% of the KNC circulation in the market, artificially creating a price increase, increasing the nominal value of collateral, and then using the aggregate calculation loophole of FTX’s margin system to spread his KNC holdings across multiple sub-accounts. He attempted to withdraw as much money as possible before the price collapsed, using artificially inflated KNC as collateral to borrow funds. However, this time, a junior employee at FTX discovered the correlation in the flow of funds and identified the connection to previous operations. FTX promptly took account freezing measures and implemented new margin trading restrictions.
Subsequently, FTX began to gradually realize Meerun's pattern, yet he still successfully withdrew $68 million.
Criminal networks and behind-the-scenes doubts.
The FTX lawsuit documents not only accuse Meerun of market manipulation but also link him to organized crime groups in multiple countries. These allegations include:
Connected to criminal networks in Poland, Romania, and Ukraine, involving human trafficking and money laundering.
Related to Islamic extremist groups, possibly involved in terrorism financing.
In the face of these allegations, Meerun has always denied any wrongdoing. He claims that his trading on FTX was completely compliant with the rules and even emphasized that he incurred losses in the process. He stated: "I have no connection to any organized crime networks and have never funded extremism or terrorist activities."
Interestingly, according to @LouisOrigny, Meerun submitted a $12 million claim to FTX's bankruptcy creditors in 2024.
All I can say is, one fish, multiple meals; let me figure it out...
