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Alameda Wallet Under Liquidator Control Incurred $11.5M in Losses: Arkham

According to Arkham, at least $4 million of these losses might have been avoided.

Since assuming possession of Alameda Research’s trading accounts, the liquidators have reportedly lost at least $11.5 million.

On Jan. 16, Arkham Intelligence reported on Twitter that one wallet under liquidator control had a run of “substantial losses” owing to liquidations, some of which were “preventable losses.”

As an example, Arkham observed that when the liquidators first took possession, the account ending in 0x997 held a short position of 9,000 Ether ($10.8 million) against the collateral of $20 million in USD Coin and $4 million in Dai, with a net balance of $15.2 million.

However, after nearly two weeks of liquidations, the account’s current value is “$1.1M short Ether against $1.4M USDC: net balance of $300K.”

According to Arkham, this is the latest “series of market swings that have blown many Alameda holdings left open following the bankruptcy.”

On December 29, about 30 hours after liquidators began moving assets out of Alameda wallets, Alameda wallets transferred $7 million in USDC and $4 million in DAI from the decentralized crypto lending site Aave to a separate Optimism L2 account.

This withdrawal of cash is thought to have put the position at great risk of liquidation, resulting in the sale of $11.4 million in USDC to liquidation bots on Optimism. At the same time, the Aave treasury grabbed another $100,000 in USDC as liquidation tax.

Arkham claimed that if liquidators had used a mechanism to instantly liquidate the position by selling off collateral rather than removing collateral from the wallet, at least $15 million may have been saved instead of the $11 million collected.

This resulted in $4 million in avoidable losses.

Cointelegraph reported on January 13 that Alameda Research Liquidators lost $72,000 in digital currencies when combining cash into a single Aave wallet.

The liquidators attempted to settle a borrowing position but removed more collateral by mistake, putting the assets at risk of liquidation. The loan was liquidated twice in nine days, resulting in a total loss of 4.05 in wrapped Bitcoin (WBTC) that creditors would not be able to recover.


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