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

Approximately $4 million of these losses could be avoided, according to Arkham, a Crypto analytics firm.

The liquidators of Alameda Research have allegedly caused at least $11.5 million in losses since assuming command over Alameda’s trading accounts.

On Jan. 16, a Twitter thread from Arkham Intelligence revealed that one wallet heavily influenced by liquidators has seen a line of “significant losses” because of liquidations, some of which were “preventable losses.”

As one example, Arkham noted that the account finishing off with 0x997 at first had a short place of 9,000 Ether ($10.8 million) against the collateral of $20 million in USD Coin and $4 million in Dai , with a net total of $15.2 million when the liquidators previously took control.
After a string of liquidations spanning very nearly fourteen days however, the account’s ongoing value now remains at “$1.1M short Ether against $1.4M USDC: net total of $300K.”

This is the latest development in a series of market developments that have busted multiple Alameda positions left open after the bankruptcies.

Another liquidation happened when Alameda wallets removed $7 million in USDC and $4 million in DAI from the decentralized crypto lending platform Aave to a separate Hopefulness L2 account on Dec. 29, something like 30 hours after liquidators began moving assets out of Alameda wallets.

This removal of funds is accepted to have placed the position at a high risk of liquidation, resulting in $11.4 million of USDC being sold off to liquidation bots on Idealism, while the Aave treasury took another $100,000 in USDC as liquidation tax.

Arkham made sense of that if liquidators had used a function for immediately close the position by auctioning off collateral as opposed to pulling collateral from the wallet, at least the recovered $11 million could have been preserved.

On Jan. 13, Alameda Research liquidators lost $72,000 in digital assets while consolidating funds into a solitary wallet on Aave.

The liquidators attempted to close a borrow position however mistakenly removed additional collateral, putting the assets at risk of liquidation. Over a time of nine days, the loan was liquidated two times, resulting in a total loss of 4.05 Wrapped Bitcoin (WBTC), which can not be recouped by creditors.