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, revealed the frequent occurrence of “significant security incidents” resulting from the company’s fast-paced operations. He documented these allegations in a post titled “The Hacks” on the platform X.
One incident highlighted 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 also disclosed that Alameda engaged in yield farming on a new Blockchain platform of questionable legitimacy, leading to losses exceeding $40 million.
According to Baradwaj, Sam Bankman-Fried, the founder of FTX, considered speed to be the “single most important thing” for both Alameda and FTX. This mindset resulted in the company often neglecting industry-standard engineering and accounting practices followed by similar firms.
Baradwaj revealed that this approach led to minimal code testing and incomplete balance accounting. Safety checks for Trading were implemented only when necessary. As a result, an outdated version of plaintext files containing keys to Alameda’s wallets was leaked, allowing an attacker to move funds out of several exchanges, resulting in losses exceeding $50 million. Baradwaj mentioned that similar incidents had occurred before his time at the company.
Since the collapse of Alameda and FTX in November of the previous year, the former engineer has publicly addressed the various shortcomings of both entities. He has criticized founder Sam Bankman-Fried for justifying actions under the guise of an idealistic philosophy known as Effective Altruism, which Baradwaj deemed “ridiculous.”
Baradwaj’s revelations coincided with former Alameda CEO Caroline Ellison testifying against Bankman-Fried during his fraud trial. Other former colleagues, including Adam Yedidia and Gary Wang, provided substantial evidence against the former billionaire. Wang openly admitted to coding algorithms that allowed Alameda to trade with a nearly unlimited credit line from FTX, while Ellison provided detailed explanations regarding alleged mingling of funds between FTX and Alameda.
Although Bankman-Fried has pleaded not guilty to the charges against him, he continues to assert his innocence throughout the ongoing trial..
#Whistleblower #Alleges #Alameda #Research #Lost #190M #Avoidable #Scams
One incident highlighted 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 also disclosed that Alameda engaged in yield farming on a new Blockchain platform of questionable legitimacy, leading to losses exceeding $40 million.
According to Baradwaj, Sam Bankman-Fried, the founder of FTX, considered speed to be the “single most important thing” for both Alameda and FTX. This mindset resulted in the company often neglecting industry-standard engineering and accounting practices followed by similar firms.
Baradwaj revealed that this approach led to minimal code testing and incomplete balance accounting. Safety checks for Trading were implemented only when necessary. As a result, an outdated version of plaintext files containing keys to Alameda’s wallets was leaked, allowing an attacker to move funds out of several exchanges, resulting in losses exceeding $50 million. Baradwaj mentioned that similar incidents had occurred before his time at the company.
Since the collapse of Alameda and FTX in November of the previous year, the former engineer has publicly addressed the various shortcomings of both entities. He has criticized founder Sam Bankman-Fried for justifying actions under the guise of an idealistic philosophy known as Effective Altruism, which Baradwaj deemed “ridiculous.”
Baradwaj’s revelations coincided with former Alameda CEO Caroline Ellison testifying against Bankman-Fried during his fraud trial. Other former colleagues, including Adam Yedidia and Gary Wang, provided substantial evidence against the former billionaire. Wang openly admitted to coding algorithms that allowed Alameda to trade with a nearly unlimited credit line from FTX, while Ellison provided detailed explanations regarding alleged mingling of funds between FTX and Alameda.
Although Bankman-Fried has pleaded not guilty to the charges against him, he continues to assert his innocence throughout the ongoing trial..
#Whistleblower #Alleges #Alameda #Research #Lost #190M #Avoidable #Scams
