Former Engineer Reveals $190 Million Worth of Hacks at Alameda Research
Aditya Baradwaj, a former engineer at Alameda Research, has come forward with details about a series of cyber attacks that the investment firm faced. These incidents amount to an astonishing $190 million in losses. Baradwaj, in a recent series of social media posts, disclosed three specific breaches but also hinted at the possibility of more attacks:
“These are just a few incidents – there’s many more, including from before my time at the company.”
Phishing Attack: $100 Million Loss
The largest incident involved a phishing attack that resulted in over $100 million in losses. An Alameda trader fell victim to this attack when they clicked on a fraudulent website link while attempting to finalize a DeFi transaction. Baradwaj revealed that this malicious link had been promoted to the top of Google Search results.
Leaked Keys: $50 Million Loss
The second-largest incident led to losses of $50 million. Baradwaj suggested that a former employee might have leaked an outdated version of the investment firm’s plaintext keys. This allowed the attacker to transfer funds out of exchanges and place fraudulent orders.
Questionable Yield Farming: $40 Million Loss
A loss of $40 million occurred during yield farming on a new blockchain with dubious legitimacy. The creator of the blockchain held the funds hostage, resulting in months of negotiations.
Baradwaj criticized Sam Bankman-Fried, founder of FTX, for not taking adequate measures to prevent future attacks despite significant financial losses:
“Was the tradeoff worth it? Sam certainly seemed to think so. Even after all these incidents, no serious attempt was made to change the way we operated.”
Baradwaj’s Critique of Alameda Research
This is not the first time Baradwaj has criticized his former employer. In a series of posts on August 23, he accused Bankman-Fried of taking his “entire life savings” through the operation of the now-defunct crypto exchange FTX. Baradwaj also expressed concerns about suspicious activities he witnessed during his time at Alameda Research but noted that he enjoyed a luxurious lifestyle, traveling, socializing with celebrities, and engaging with political figures. He described this as “careless risk management for a company handling billions of dollars in capital.”
On another note, according to Conor Grogan, Coinbase’s head of product and business operations, Alameda Research allegedly generated $39.5 billion in USDT (Tether) before its bankruptcy.
Hot Take: Is Alameda Research Negligent or Victim of Sophisticated Attacks?
The revelations made by Aditya Baradwaj shed light on the vulnerability of Alameda Research to cyber attacks. While the investment firm suffered significant financial losses, it is important to question whether they were simply negligent in their security measures or if they fell victim to sophisticated attacks that are difficult to prevent.
Baradwaj’s claims about Sam Bankman-Fried’s lack of effort to improve security practices raise concerns about the company’s risk management approach. However, it is crucial to consider both sides of the story and gather more evidence before making any final judgments.
The alleged generation of billions of dollars in USDT by Alameda Research before its bankruptcy adds another layer of complexity to this situation. It remains to be seen how these revelations will impact the reputation and future of the firm.
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