Former Alameda Research Engineer Claims $190 Million Losses Due to Scams
A former engineer at Alameda Research, a hedge fund affiliated with FTX, has come forward as a whistleblower, alleging that the firm suffered losses of over $190 million due to preventable scams. Aditya Baradwaj highlighted the frequent occurrence of significant security incidents resulting from the fast-paced operations of the company. Baradwaj documented these allegations in a post titled “The Hacks” on the platform X.
Malicious Link Causes Loss of $100 Million
Baradwaj reported a major incident where a trader at Alameda lost more than $100 million by clicking on a malicious link that appeared as a top result in a Google search. The trader intended to authorize a decentralized finance transaction.
Revealing Risky Practices at Alameda
Baradwaj exposed that Alameda engaged in yield farming on a questionable new blockchain platform, resulting in losses exceeding $40 million.
PART 3: THE HACKS
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How poor security practices at Alameda Research caused the company to lose hundreds of millions of dollars
(1/n) leaked.
The attacker then moved funds out of several exchanges, resulting in losses exceeding $50 million. Baradwaj mentioned that Alameda experienced numerous similar incidents, although many occurred before his time at the company.
Since the collapse of Alameda and FTX in November of last year, Baradwaj has publicly discussed the shortcomings of both entities. He has criticized founder Sam Bankman-Fried’s justifications for his actions under the guise of Effective Altruism.
Exposing SBF’s Actions in Trial
Baradwaj’s revelations align with former Alameda CEO Caroline Ellison testifying against Bankman-Fried during his fraud trial. Other former colleagues, including Adam Yedidia and Gary Wang, have also provided significant evidence against the former billionaire.
Wang openly admitted to coding algorithms that allowed Alameda to trade with an almost unlimited credit line from FTX. Meanwhile, Ellison has detailed the alleged mingling of funds between FTX and Alameda.
Bankman-Fried maintains his innocence and pleads not guilty to the charges against him throughout the ongoing trial.
Hot Take: Allegations of Massive Losses Due to Poor Security Practices at Alameda Research
A whistleblower has accused Alameda Research of incurring losses exceeding $190 million as a result of preventable scams and security incidents. The former engineer highlights specific instances where a trader lost over $100 million due to clicking on a malicious link and another incident involving yield farming resulting in losses of over $40 million. These allegations come amidst the ongoing fraud trial of Sam Bankman-Fried, the founder of Alameda and FTX, where further evidence has been presented by former colleagues. As the trial continues, the industry awaits the outcome and potential implications for these prominent crypto entities.
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