Alameda Research lost nearly $200M to scams, ex-engineer says
Cryptopolitan (RSS)
Alameda Research and FTX revelations are coming in evil and in tandem. The crypto ecosystem is plagued by phishing attacks and hacks, so you would expect large-scale traders to implement high levels of security and safeguards against such threats.
However, Alameda Research does not understand what that is. Ex-employee Aditya Baradwaj asserts that Sam Bankman-Fried’s beleaguered trading firm lost at least $200 million to a number of common attack vectors that are rampant in the industry.
Alameda Research – Not so smart after all
According to a former engineer at the firm, Alameda Research, the sister hedge fund of FTX, lost at least $190 million in trading capital to allegedly avoidable schemes.
Aditya Baradwaj, a former Alameda Research engineer turned whistleblower, claimed in a post titled “The Hacks” on October 12 that the company’s “breathtaking” agility led to “major security incidents” every few months.
SBF believed that the single most important thing for a startup like Alameda or FTX was being able to move very, very fast […] This meant virtually no code testing and incomplete balance accounting […] Blockchain private keys and exchange API keys were stored in plaintext in a file that several employees could access.
Aditya Baradwaj
Baradwaj states that a trader at Alameda once lost more than $100 million of the firm’s capital after following a fraudulent link put to the top of Google Search results.
According to Baradwaj, the trader was attempting to sign off on a decentralized finance transaction.
Alameda lost $40 million through yield farming on a “new blockchain of questionable legitimacy,” with the network’s founder holding the company’s assets hostage. Months of talks took place; however, it is unknown whether these funds were ever recovered.
Yield farming is an increasingly popular method to earn incentives by feeding tokens to a blockchain-based financial application. However, dubious actors’ programs may prevent withdrawals after drawing a significant amount of capital, resulting in losses.
SBF believed that the single most important thing for a startup like Alameda or FTX was being able to move very, very fast
So much so that he decided to ignore engineering and accounting practices that are considered standard at tech companies and financial services firms
— Adi (e/acc) (@aditya_baradwaj) October 11, 2023
Another security mishap happened when private keys or a password to a secure crypto storage facility were exposed, “likely by a former employee.” The attack cost Alameda more than $50 million in tokens.
He claimed that Alameda had “many more” occurrences of the same magnitude as the ones he had mentioned but that many of these occurred before his time at the business. The former engineer has been speaking openly about the company’s numerous flaws following the collapse of Alameda Research and FTX in November of last year.
Such losses did not stop in Alameda Research. FTX, Bankman-Fried’s second company, lost nearly $400 million shortly after filing bankruptcy in November 2022. Poor private key management was proven to be the root cause of the attack, which could have cost the company up to $1 billion.
According to Michael Lewis’s recently published biography of Bankman-Fried, the creator lost at least $500,000 every day during Alameda’s early days and once misplaced almost $4 million in XRP tokens.
All is fair in love and war – Caroline Ellison
Baradwaj’s remarks come as former Alameda Research CEO Caroline Ellison takes the stand to testify against Bankman-Fried on the sixth day of his fraud trial. In recent days, a number of former colleagues, notably Adam Yedidia and Gary Wang, have presented a slew of new...
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Cryptopolitan (RSS)
Alameda Research and FTX revelations are coming in evil and in tandem. The crypto ecosystem is plagued by phishing attacks and hacks, so you would expect large-scale traders to implement high levels of security and safeguards against such threats.
However, Alameda Research does not understand what that is. Ex-employee Aditya Baradwaj asserts that Sam Bankman-Fried’s beleaguered trading firm lost at least $200 million to a number of common attack vectors that are rampant in the industry.
Alameda Research – Not so smart after all
According to a former engineer at the firm, Alameda Research, the sister hedge fund of FTX, lost at least $190 million in trading capital to allegedly avoidable schemes.
Aditya Baradwaj, a former Alameda Research engineer turned whistleblower, claimed in a post titled “The Hacks” on October 12 that the company’s “breathtaking” agility led to “major security incidents” every few months.
SBF believed that the single most important thing for a startup like Alameda or FTX was being able to move very, very fast […] This meant virtually no code testing and incomplete balance accounting […] Blockchain private keys and exchange API keys were stored in plaintext in a file that several employees could access.
Aditya Baradwaj
Baradwaj states that a trader at Alameda once lost more than $100 million of the firm’s capital after following a fraudulent link put to the top of Google Search results.
According to Baradwaj, the trader was attempting to sign off on a decentralized finance transaction.
Alameda lost $40 million through yield farming on a “new blockchain of questionable legitimacy,” with the network’s founder holding the company’s assets hostage. Months of talks took place; however, it is unknown whether these funds were ever recovered.
Yield farming is an increasingly popular method to earn incentives by feeding tokens to a blockchain-based financial application. However, dubious actors’ programs may prevent withdrawals after drawing a significant amount of capital, resulting in losses.
SBF believed that the single most important thing for a startup like Alameda or FTX was being able to move very, very fast
So much so that he decided to ignore engineering and accounting practices that are considered standard at tech companies and financial services firms
— Adi (e/acc) (@aditya_baradwaj) October 11, 2023
Another security mishap happened when private keys or a password to a secure crypto storage facility were exposed, “likely by a former employee.” The attack cost Alameda more than $50 million in tokens.
He claimed that Alameda had “many more” occurrences of the same magnitude as the ones he had mentioned but that many of these occurred before his time at the business. The former engineer has been speaking openly about the company’s numerous flaws following the collapse of Alameda Research and FTX in November of last year.
Such losses did not stop in Alameda Research. FTX, Bankman-Fried’s second company, lost nearly $400 million shortly after filing bankruptcy in November 2022. Poor private key management was proven to be the root cause of the attack, which could have cost the company up to $1 billion.
According to Michael Lewis’s recently published biography of Bankman-Fried, the creator lost at least $500,000 every day during Alameda’s early days and once misplaced almost $4 million in XRP tokens.
All is fair in love and war – Caroline Ellison
Baradwaj’s remarks come as former Alameda Research CEO Caroline Ellison takes the stand to testify against Bankman-Fried on the sixth day of his fraud trial. In recent days, a number of former colleagues, notably Adam Yedidia and Gary Wang, have presented a slew of new...
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Adi (@adi_baradwaj) on X
PART 3: THE HACKS
or
How poor security practices at Alameda Research caused the company to lose hundreds of millions of dollars
(1/n) 🧵
#SBF #FTX
or
How poor security practices at Alameda Research caused the company to lose hundreds of millions of dollars
(1/n) 🧵
#SBF #FTX
⚖️ SBF Appeals to Supreme Court to Overturn Conviction and $11B Fine
Former FTX CEO Sam Bankman-Fried has officially petitioned the US Supreme Court to overturn his 2023 fraud conviction. The filing also seeks to reverse a massive $11 billion forfeiture order, arguing the fine is excessive and violates the Eighth Amendment.
His legal team claims the original trial judge unfairly excluded evidence showing his investments were sound and could have potentially covered FTX customer losses. This move follows a June decision by the 2nd US Circuit Court of Appeals that upheld his 25-year prison sentence.
Bankman-Fried was convicted on seven counts of fraud and conspiracy for using billions in customer funds to finance Alameda Research debts and personal spending. Beyond the court system, he has also reportedly applied for a pardon from President Donald Trump.
#FTX #SBF #CryptoNews #SupremeCourt
Former FTX CEO Sam Bankman-Fried has officially petitioned the US Supreme Court to overturn his 2023 fraud conviction. The filing also seeks to reverse a massive $11 billion forfeiture order, arguing the fine is excessive and violates the Eighth Amendment.
His legal team claims the original trial judge unfairly excluded evidence showing his investments were sound and could have potentially covered FTX customer losses. This move follows a June decision by the 2nd US Circuit Court of Appeals that upheld his 25-year prison sentence.
Bankman-Fried was convicted on seven counts of fraud and conspiracy for using billions in customer funds to finance Alameda Research debts and personal spending. Beyond the court system, he has also reportedly applied for a pardon from President Donald Trump.
#FTX #SBF #CryptoNews #SupremeCourt