amc ftx

Was FTX Being Used To Manipulate the Price of AMC Stock?

4 min read

This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.



FTX AMC: The now defunct crypto exchange FTX once offered its users the option of trading synthetic, tokenised stocks on its platform. Tokenised stocks are digital assets that mimic the price action of publicly traded stocks.

The Chainsaw previously reported that FTX may have been a ‘back door’ for hedge funds looking to short GameStop and Tesla stocks. However, further research has revealed that FTX may have also been used to facilitate shady trading of AMC shares as well. 

This comes after The Chainsaw dug up an Etherscan contract for a total supply of 525,000 ‘wrapped AMC’ tokens that were listed on the FTX exchange. Apart from this on-chain listing being blatantly inconsistent with statements from its official website claiming that roughly 400 million tokenised AMC shares were available for trading, it also raises some serious doubts as to whether FTX ever owned the underlying AMC shares at all. 

Screenshot of ‘FTX Wrapped AMC Tokens’ from EtherScan.

Analysts argue that these synthetic stocks may well have been used by hedge funds and other financial institutions looking for an alternative means to manipulate the price of AMC stock off the books. 

A tweet from Chartered Financial Analyst, Peter R Hann criticised the synthetic AMC tokens listed on FTX, suggesting that the underlying assets may not be findable by brokers.

“When you borrow shares to short, your broker has to claim they can locate. If some stupid crypto exchange says they have 400 million AMC shares, then maybe the broker claims they can easily find,” wrote Hann.

Did FTX ever own the underlying AMC shares?

As recently as November 7, the FTX website indicated they had issued 400 million AMC digital tokens, which they claimed were backed by AMC shares held at their custodian CM Equity AG. However, a recent attestation published by CM Equity showed that the firm severed all relationships with FXT in December 2021.

Screenshot from CM Equity AG’s November 11 post.

Essentially, this means that if FTX ever bought AMC shares they were certainly not custodied with CM Equity any time in 2022. Furthermore, leaked balance sheet data for FTX showed that the exchange never held any actual shares except for Robinhood (HOOD). 

Leaked FTX balance sheet, via Financial Times.

In a further self-incriminating move, 5 days ago on November 27, FTX scrubbed any evidence of the AMC whitepaper from its official webpage.

How did FTX’s token manipulate the price action of AMC?

When derivatives are traded, the stock broker charges something called a ‘stock borrow fee’ which is charged to lend shares to short sellers to bet against the stock, which is called the ‘cost to borrow’. The higher the ‘cost to borrow’ fee, the harder it becomes to borrow the stock.

Essentially, these tokenised stocks on FTX allowed hedge funds to say, ‘look there’s 10 million tokenised shares over here’ that could be redeemed for real ones which reduces the cost to borrow because there’s peace of mind that the shares can and will be located. 

A quick look at AMC’s cost to borrow fee

To get a clearer picture of the sort of price manipulation that FTX could have been facilitating, let’s take a look at the cost to borrow fee of AMC shares around the time of the FTX crash. 

From late-August to early November, the cost to borrow fee of AMC hovered around an average of roughly 18% on November 8, just two days before the bank run on FTX would occur. From November 8th onwards, the cost to borrow fee skyrocketed and ended up above 55% on November 10, the day that FTX was revealed to be insolvent. Then, on November 12, the cost to borrow dropped to just below 45%. 

This has led many to speculate that brokers and market makers were using the AMC token on FTX as a way of ensuring that they had ‘located’ an underlying share. It seems  reasonable to imagine that hedge funds and market makers could easily use such a tactic to fulfil their regulatory obligations. 

FTX’s growing pile of lies

In addition to lying about having the underlying tokenized AMC assets custodied with CM Equity, the exchange also purposely misled investors about the nature of redemptions. 

Despite clear claims from FTX website assuring investors that they could redeem their tokenized assets for the underlying at anytime, a deeper look into FTX’s own terms of service on tokenised stocks and Key Information Document state: buyers of the Fractional Stocks have neither a claim to delivery of the underlying.

Screenshot of FTX’s disclaimer on tokenised stocks. 

This ultimately means that FTX knowingly lied and misled customers on its official website, and went directly against its own terms of service. Overall, it’s entirely possible that the synthetic shares — along with the many inconsistencies concerning their listing and custody — may have been used by third parties looking to manipulate the price action of AMC on stock exchanges like the NASDAQ.