A former Alameda Research engineer has uncovered several management errors that caused the company to lose at least $190 million. These irregularities include catastrophic private key management.
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Phishing et clés privées mal stockées : ces fautes qui ont coûté 190 M$ à Alameda Research
Alameda Research: Multiple errors caused millions of dollars in losses
While some practices might be considered “rookie mistakes” to an inexperienced investor, this is a mistake when it comes to a company that manages billions of dollars of client assets. On this topic, Aditya Baradwaj, a former engineer at Alameda Research, posted a thread in which He recounts his former company’s shaky practices that caused it to lose millions of dollars.
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The first reported “incident” states that an Alameda Research trader suffered a phishing attack by clicking on a fraudulent advertising link that spoofed a decentralized finance (DeFi) application in Google search results. This mistake cost the company $100 million.
Then Aditya Baradway explains that the creator of a “blockchain of dubious legitimacy” took the company’s funds hostage during yield farming. The negotiations lasted several months and cost $40 million at Alameda Research:
Incident #2:
We have started yield farming on a new blockchain with questionable legitimacy. In the end, the founder held our funds hostage and we had months of protracted negotiations
Cost: $40M+
Postmortem: Decided to be more careful about which chains/protocols we trade with
– Adi (e/acc) (@aditya_baradwaj) October 11, 2023
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The most surprising flaw, however, concerns the disastrous management of the company’s private keys. Actually this one would have been saved in plain text in a file accessible to multiple employeesalong with secret API keys, an irregularity that would have cost $50 million:
“An old version of our plaintext keystore has been leaked, likely by a former employee. The attacker transferred funds from certain exchanges and placed false orders. Cost: $50 million. »
According to the former Alameda Research engineer, “these are just a few incidents” that caused monetary losses to the company, which has already experienced “many others.” However, please note that the person concerned The dates of the incidents in question were not specified.
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In my search for financial freedom, I shyly discovered the world of blockchain at the end of 2018. Initially moderately invested, it was only two years later that I dared to bet everything on the movement that was then taking shape. I will then dedicate the year 2021 to better training in order to acquire more knowledge and seriousness. As I often say: I still have a billion things to learn. And I want to share what I know with you.
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