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Arkham Intel: Alameda Research liquidators incur losses worth…

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  • Liquidators have reportedly lost at least $11.5 million since taking control of Alameda Research’s trading accounts, as per Arkham Intel.
  • The total preventable loss has been estimated to be $4 million.

Liquidators reportedly lost at least $11.5 million since taking control of Alameda Research’s trading accounts, as per a tweet by Arkham Intel on 17 January.

What’s going on with Alameda Research?

As per the tweet above, one wallet under liquidators’ control had a string of “significant losses” due to liquidations, some of which could be avoided.

When the liquidators first took control, the account ending in 0x997 had a short position of 9,000 Ether [ETH] ($10.8 million) against a collateral of $20 million in USD Coin [USDC] and $4 million in Dai [DAI], with a net balance of $15.2 million.

Arkham Intel stated that after nearly two weeks of liquidations, the account’s current value was $1.1 million short Ether against $1.4 million USDC, with a net balance of $300,000 at the time of the tweet.

On 29 December 2022, Alameda wallets transferred $7 million in USDC and $4 million in DAI from the decentralized crypto lending platform Aave [AAVE] to an Optimism [OP] L2 account, 30 hours after liquidators began moving assets out of Alameda wallets.

This withdrawal of funds is thought to have put the position at high risk of liquidation, resulting in the sale of $11.4 million in USDC to liquidation bots on Optimism, while the Aave treasury took another $100,000 in USDC as liquidation tax.

If liquidators had used a function to immediately close the position by selling off collateral rather than withdrawing collateral from the wallet, at least $15 million could have been saved instead of the $11 million recovered.

Preventable Losses worth $4 Million

This thus amounted to $4 million in preventable losses.

Additionally, on 12 January, Alameda Research liquidators lost crypto assets worth $72,000 while consolidating funds into a single wallet on Aave.

The liquidators tried closing a borrow position but accidentally removed the additional collateral, putting the assets at risk of liquidation. The loan got liquidated twice over nine days, resulting in a total loss of 4.05 Wrapped Bitcoin [WBTC] which the creditors cannot recover.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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