How Alameda Liquidators Are Losing Millions in Crypto Markets

Liquidators drive the point home – Last November, the trading platform FTX sank, taking sister company Alameda Research with it. Since then, the funds of the defunct entities have been placed under the control of liquidators. Unfortunately, the latter chain errors.

Liquidation in liquidation

Faced with the collapse of FTX and Alameda Research, a The company has been instructed to liquidate the funds of both platforms. However, they don’t necessarily seem happy with the process. This was announced by the internet user ArkhamIntel on Twitter.

ArkhaIntel reveals liquidations suffered by Alameda liquidator.

So it all started on January 14, when Alameda Research’s liquidators account was liquidated by him. In total, more thanone million dollars have been liquidated from the platform Aave IN Layer 2 Optimism.

Surprisingly, it seems it already was two weeks the account was delinquent. This shows a cruel lack of attention and professionalism on the part of the company responsible for the liquidation.

As you will have realized, this fiasco did not stop at a single liquidation. Over the past few weeks, the liquidation account has lost about 11 million dollars in some liquidations. Shame that one liquidator is the victim of so many liquidations.

So when the company took over the account, she had one Short ETH position of 9,000 ETH, secured by collateral of 20 million USDC. To date, the position includes only 1.1 million dollars in ETH, collateralized with 1.4 million USDC.

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Surprising move

It would be possible to point the finger at the difficult conditions faced by the market for justify these liquidations. However, on closer inspection, it appears that the fault lies with the liquidator.

The liquidator started moving the funds around December 29th. Since then, many more than surprising movements have been identified.

“On the morning of December 29, $7 million USDC and $4 million DAI were withdrawn from AAVE and sent to a separate Optimism L2 account 0x7b7. This was about 30 hours after liquidators began moving assets from Alameda wallets in response to the attack on the mainnet. »

This withdrawal pushed the position dangerously close to liquidation. Finally, without action by the liquidator, 11.4 million dollars have been liquidated in Aave.

Moreover, it appears that these could have been avoided. Initially, the liquidator probably should have prioritized the health of the positions before making transfers.

“Surprisingly, trades outside the portfolio were made before and during the liquidation. Between the two liquidation trades, account 0x997 was sending 5 digits of OP to account 0x7b7. We don’t really know why this was prioritized over closing the position. »

However, we hope that liquidators will stop wasting such sums unnecessarily. Indeed, FTX users still have hope to recover some of their deposits.

In the last turns of the case, it was proved that Sam Bankman Fried had opened a $65 billion credit line for Alameda Researchobviously using user funds.

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