A former engineer at Alameda Research, the sister hedge fund of FTX, has alleged that the firm suffered losses of over $190 million due to preventable scams. Aditya Baradwaj, the whistleblower, highlighted the frequent security incidents resulting from the company’s fast-paced operations. Baradwaj documented these allegations in a post titled “The Hacks” on the platform X.One significant incident reported by Baradwaj involved a trader at Alameda who lost over $100 million of the company’s funds by clicking on a malicious link that appeared as a top result in a Google search. The trader had intended to authorize a decentralized finance transaction.Baradwaj revealed that Alameda engaged in yield farming on a new blockchain platform of questionable legitimacy, resulting in losses exceeding $40 million. He also stated that the founder of FTX, Sam Bankman-Fried, believed that the ability to move quickly was the most important thing for both Alameda and FTX. This philosophy led the company to disregard industry-standard engineering and accounting practices.According to Baradwaj, this approach resulted in minimal code testing and incomplete balance accounting. Safety checks for trading were only implemented when necessary, leading to a security incident where outdated plaintext files containing keys to Alameda’s wallets were leaked. The attacker then moved funds out of several exchanges, resulting in losses of over $50 million.Baradwaj mentioned that Alameda had experienced numerous similar incidents, although many occurred before his time at the company. Since the collapse of Alameda and FTX, the former engineer has publicly discussed the shortcomings of both entities and criticized Bankman-Fried’s actions, which he deemed “ridiculous,” under the guise of an idealistic philosophy known as Effective Altruism.These revelations coincide with former Alameda CEO Caroline Ellison testifying against Bankman-Fried in his fraud trial. Other former colleagues, including Adam Yedidia and Gary Wang, have provided substantial evidence against the former billionaire. Wang admitted to coding algorithms that allowed Alameda to trade with a nearly limitless credit line from FTX, while Ellison has explained the alleged mingling of funds between FTX and Alameda.Bankman-Fried has pleaded not guilty to the charges against him and maintains his innocence throughout the ongoing trial.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Sam Bankman-Fried, Gary Wang, Adam Yedidia, Caroline Ellison, Aditya Baradwaj |
| Companies | FTX, Alameda Research, PrimeXBT, Binance, X |
| Currencies | HairyPlotterFTX |
| Securities | None |
