Written by: Nanzi, Odaily Planet Daily
Last week, a lawsuit document from FTX showed that a Mauritian citizen named Nawaaz Mohammad Meerun (hereinafter referred to as Meerun) extracted $1.2 billion from the FTX exchange and Alameda Research within a year, but never left any conclusive evidence.
First appearance: A mysterious whale steals $450 million
Meerun's first battle occurred in January 2021, when he chose a token with extremely low liquidity, BTMX, as his first prey. Within two months, he continuously bought BTMX through the BitMax and FTX platforms, eventually controlling about 50% of the total supply. Driven by Meerun, the price of BTMX soared from $0.03 to $3, an increase of 10,000%.
Thereafter, Meerun used the loophole in FTX's margin trading system to borrow billions of dollars using the inflated BTMX as collateral. He then quickly withdrew the funds and transferred $450 million to multiple wallet addresses.
The lawsuit pointed out: "Meerun clearly knew that once his manipulation stopped, the price of BTMX would collapse, and he would need to return all the 'borrowed' assets. But Meerun never intended to abide by FTX's rules."
Although BitMax warned the FTX team about the abnormal transactions, the FTX management did not take any action. FTX locked his account but forgot to stop his withdrawal function. After Meerun cashed out and left, some employees even tried to shift this loss to Alameda Research to cover up the incident.
Alameda becomes 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 on FTX that accounted for about 10% of the total MOB supply, and then Alameda was forced to take on these positions. To cover the short positions, Alameda bought a large amount of the token.
The price of MOB soared 750% from $8 to $68 during Alameda's weeks-long buying frenzy, and Alameda paid a significant premium. After Alameda slowed down its buying, the price quickly plummeted. Ultimately, this transaction caused Alameda to lose about $1 billion, while Meerun successfully cashed out again.
In August 2021, Meerun allegedly used new accounts and aliases to implement similar manipulation plans with less liquid tokens such as BAO, TOMO, and SXP on FTX, earning nearly $200 million before FTX detected it.
KNC incident: The last attempt, failed (or not?)
After multiple successes, Meerun again set his sights on the KNC token. He carefully set up a complex account structure, using stolen or forged KYC materials, fake addresses, and non-existent postal codes to open FTX accounts. He also set up 64 sub-accounts under the main account to circumvent FTX's collateral limits.
Then, he heavily bought another low-liquidity token, KNC, through multiple accounts simultaneously to drive up the price, ultimately controlling about 70% of the circulating KNC. He artificially inflated the price to increase the nominal value of the collateral, and then used FTX's margin system's aggregation calculation loophole to distribute the KNC holdings across multiple sub-accounts, using the artificially inflated KNC as collateral to borrow funds, trying to withdraw as much as possible before the price collapsed. However, this time, a junior FTX employee discovered the correlation of the fund flows, identified the connection with the previous operations, and FTX promptly took account freezing measures and implemented new margin trading restrictions.
Afterwards, FTX gradually became aware of Meerun's pattern, but he still managed to withdraw $68 million.
Criminal network and behind-the-scenes doubts
FTX's lawsuit not only accused Meerun of market manipulation but also linked him to organized crime groups in multiple countries. These allegations include:
Connections with criminal networks in Poland, Romania, and Ukraine, involving human trafficking and money laundering.
Associations with Islamic extremist groups, possibly involved in terrorist financing.
Facing these accusations, Meerun has consistently denied them. He claimed that his transactions on FTX were fully in line with the rules, and even emphasized that he suffered losses in the transactions. He stated: "I have no connection with any organized crime network, nor have I ever funded extremism or terrorist activities."
Interestingly, according to @LouisOrigny's disclosure, Meerun submitted a $12 million claim to FTX's bankruptcy creditors in 2024.
I can only say, one fish, many meals, let the brother play it clear...
