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Former Alameda Research Engineer Reveals Hacks Leading to Multi-Million Dollar Losses

2 mins
Updated by Kyle Baird
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In Brief

  • Former Alameda Research engineer, Aditya Baradwaj, reveals several cyber attacks costing the firm $190 million.
  • The largest incident involved a phishing attack during a DeFi transaction, costing over $100 million.
  • Despite the losses, no significant changes were made to the firm's operations, according to Baradwaj.
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Aditya Baradwaj, a former engineer at Alameda Research, has detailed a series of hacks the investment firm encountered amid the fraud trial of disgraced FTX founder Sam Bankman-Fried.

The three cyber incidents he delineates add up to a staggering $190 million.

Alameda Research Allegedly Unchanged Post-Hacks

In a series of posts on X (formerly Twitter), Baradwaj revealed three separate security breaches but suggested there could be many more:

“These are just a few incidents – there’s many more, including from before my time at the company.”

The largest of the incidents revealed was one worth over $100 million. During an attempt to finalize a DeFi transaction, an Alameda trader fell victim to a phishing attack when they clicked on a fraudulent website link. Baradwaj reveals this link was elevated to the top of Google Search results.

The second-largest incident incurred losses of $50 million. Baradwaj claims that a former employee may have leaked an outdated version of the investment firm’s plaintext keys:

“The attacker transferred funds out of some exchanges and placed bad orders.”

Meanwhile, losses of $40 million occurred from yield farming on a new blockchain with “questionable legitimacy.”

The creator ended up holding their funds hostage, leading to several months of prolonged negotiations.

Baradwaj claims that, despite substantial fund losses, Bankman-Fried made no effort to safeguard against future attacks.

“Was the tradeoff worth it? Sam certainly seemed to think so. Even after all these incidents, no serious attempt was made to change the way we operated.”

Baradwaj’s Recent Critique of Former Employer

Baradwaj has used social media before to express his experiences working at Alameda Research. On August 23, he made a series of posts alleging that Bankman-Fried had taken his “entire life savings” through his operation of the now-defunct crypto exchange FTX.

He also explained that, despite his concerns and the suspicious activity he observed during his time working there, he enjoyed a lavish lifestyle.

This lifestyle involved traveling around the world, socializing with celebrities, and engaging with political figures.

He summarized it as “careless risk management for a company handling billions of dollars in capital.”

On the other hand, BeInCrypto recently reported that Alameda Research allegedly generated $39.5 billion in USDT (Tether) before its bankruptcy. The estimate was provided by Conor Grogan, Coinbase’s head of product and business operations.

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.