FTX and Alameda Liquidators Lose $72,000 on Aave Position Closure

The Alameda Research restructuring team lost 4.05 aWBTC while attempting to close a position on the lending DeFi platform Aave. Experts from Arkham Intelligence noted this.

After losing $1.7M to an attacker 2 weeks ago, the Alameda liquidators have been active on-chain moving their assets to a safe multisig.

Unfortunately, a LOT of assets, and open positions, still remain in tagged Alameda wallets.

Here’s what happened, and what they missed 👇 https://t.co/SIrlpFRNHi

— Arkham | Crypto Intelligence (@ArkhamIntel) January 12, 2023

Experts said the Alameda liquidators began actively consolidating the company’s funds on a multisig wallet after they had lost about $1.7 million in an attack two weeks earlier.

Since then the restructurers have managed to concentrate assets at the address of about $1.4 million. However, they admitted ‘a few on-chain missteps’, the experts noted.

In the attempt to withdraw funds from Aave, Alameda’s bankruptcy managers removed excess collateral from the loan position. As a result, over nine days it was liquidated twice for a total of 4.05 aWBTC (about $72,000 at the time). The token is the wrapped version of Bitcoin used on the DeFi platform.

This resulted in the liquidation of around 4 WBTC, $72K at current prices.

When positions are forcibly closed on AAVE, a penalty is also slashed from the liquidated collateral.

The liquidators, themselves, were liquidated. Are they in over their heads? pic.twitter.com/ALjFnj7S56

— Arkham | Crypto Intelligence (@ArkhamIntel) January 12, 2023

The Alameda liquidators also carried out nine failed transactions, attempting to move $1.75 million in Lido (LDO) tokens. The assets were vesting, and only after reducing the transaction amount to around $10,000 did they succeed.

The LDO tokens were still vesting, and as such the liquidators had to resort to taking out 10K LDO at a time to the central wallet.

This was, however, not before sending 9 different failed transactions. pic.twitter.com/3WjT0etORT

— Arkham | Crypto Intelligence (@ArkhamIntel) January 12, 2023

Arkham experts stressed that wallets labeled as belonging to Alameda still hold tens of millions of dollars.

‘Liquidators would benefit from having a DeFi expert to advise on Alameda’s position-closing mechanics and maximizing the recovery,’ said a representative from Arkham in a comment to Decrypt.

As reported, former Alameda CEO Caroline Ellison pleaded guilty to charges related to the collapse of Sam Bankman-Fried’s business empire.

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