Alameda Research Liquidators Incurred Losses Of $11.5 Million, $4 Million Were Preventable
Crypto analytics firm Arkham has reported that at least $4 million of the losses incurred by the Alameda wallet, which is now under liquidator control, were preventable.
Valentin
March 12, 2023
Cointelegraph reported that according to the crypto firm Arkham Intelligence, the liquidators of Alameda Research have suffered losses of at least $11.5 million since taking over control of Alameda’s trading accounts.
On January 16th, the analytics firm reported on a twitter thread that one of the wallets under the control of liquidators has experienced a series of significant losses due to liquidations, some of which were preventable.
According to Arkham Intelligence, the liquidators of Alameda Research have incurred substantial losses since taking over the trading accounts. As an illustration, the firm noted that an account ending in 0x997 originally had a short position of 9,000 Ether, with a net balance of $15.2 million when the liquidators first took control. However, after a series of liquidations spanning almost two weeks, the account’s current value is now at $1.1M short Ether against $1.4M USDC, with a net balance of $300K.
Arkham stated that this is the latest development in a series of market movements that have caused multiple Alameda positions to be left open after bankruptcy. Another liquidation occurred when Alameda wallets removed $7 million in USDC and $4 million in DAI from the decentralized crypto lending platform Aave to a separate Optimism L2 account on December 29th, about 30 hours after liquidators started moving assets out of Alameda wallets.
According to Arkham Intelligence, the removal of funds by the liquidators of Alameda Research, is believed to have exposed the position to a high risk of liquidation, resulting in the sale of $11.4 million of USDC to liquidation bots on Optimism, while Aave treasury took another $100,000 as liquidation tax.
Arkham said that if the liquidators had used a function to close the position immediately by selling the collateral instead of withdrawing it from the wallet, at least $15 million could have been preserved, instead of the $11 million that was recovered. This resulted in preventable losses of $4 million.