Alameda liquidator lose $11.5M in 2 weeks in liquidations

Alameda Research liquidators incurred a full nonaccomplishment of astir $11.5 cardinal implicit 2 weeks aft taking implicit a azygous wallet of the bankrupt firm, Arkham Intelligence reported connected Jan. 16.

Over $4 cardinal of these losses could person been prevented if the liquidators had closed the firm’s presumption alternatively of withdrawing collaterals, according to the report.

Alameda liquidations

Two weeks earlier liquidators took implicit Alameda wallet “0x997,” the code maintained a abbreviated presumption of 9000 Ethereum (ETH) – worth $10.8 cardinal astatine the clip – against a collateral of $20 cardinal Circle USD (USDC) and $4 cardinal DAI with a nett equilibrium of $15.2 million, according to Arkham.

As of Jan. 17, the wallet has suffered a drawstring of losses that leaves its existent equilibrium astatine a abbreviated presumption of $1.1 cardinal ETH against $1.4 cardinal USDC with a nett equilibrium of $300,000.

How Alameda incurred the preventable loss

Arkham cited different liquidation that occurred connected Dec. 29, 2022, wherever Alameda liquidators removed $7 cardinal USDC and $4 cardinal DAI from AAVE, sending them to a abstracted L2  Optimism (OP) relationship ‘0x7b7’.

The removal of collateral connected AAVE placed the Alameda positions “dangerously adjacent to liquidation.” Eventually, it resulted successful $11.4 cardinal USDC being sold to liquidation bots connected Optimism, portion AAVE treasury received implicit $100,000 USDC successful liquidation tax, according to Arkham.

“The signifier of removing excess collateral from progressive positions fits the illustration of their accustomed behavior.”

The liquidators could person preserved astir $15 cardinal of the funds if they had closed their presumption by selling disconnected collateral, Arkham reported. Instead, they chose to retreat excess collateral from the wallet, resulting successful a preventable nonaccomplishment of $4 million.

The station Alameda liquidator suffer $11.5M successful 2 weeks successful liquidations appeared archetypal connected CryptoSlate.