Former Alameda Insider Exposes Massive Security Lapses Leading To Millions In Losses

Former Alameda Research engineer Aditya Bharadwaj has shed light on the company's significant security incidents that led to the loss of hundreds of millions of dollars. 

Amid these revelations, industry experts and stakeholders are gearing up for Benzinga's Future of Digital Assets conference on Nov. 14. The conference promises to touch upon the security aspects of digital assets, making Bharadwaj's revelations even more timely and significant.

Bharadwaj, in a series of tweets, detailed a set of incidents, starting with a trader who got phished during a DeFi transaction, resulting in losses exceeding $100 million.

This particular incident was attributed to a fake link that appeared at the top of Google Search results.

In response, Alameda implemented additional safety checks for their internal wallet software.

Another security lapse involved Alameda's venture into yield farming on a dubious blockchain.

The creators of the blockchain held the company's funds hostage, leading to protracted negotiations and a loss of over $40 million.

This prompted Alameda to reevaluate the chains and protocols they engage with.

Also Read: EXCLUSIVE: Bitrue Strategy Advisor Warns US Will 'Lose Talent' Due To Crypto Regulations

Perhaps the most alarming was the leak of an outdated plaintext keys file, suspected to have been orchestrated by an ex-employee.

The attacker managed to transfer funds from several exchanges and place disadvantageous orders, leading to losses upwards of $50 million.

This spurred a migration of their secret keys to a more secure storage system.

Bharadwaj's tweets also alluded to similar incidents predating his tenure at the firm.

He highlighted that despite the recurrent security breaches, no significant changes were made in the company's operations, reflecting a risk-taking attitude that may not always pay off.

Bharadwaj's remarks coincide with ex-Alameda CEO Caroline Ellison's testimony against Sam Bankman-Fried during the sixth day of his trial.

In earlier sessions, several past associates, such as Adam Yedidia and Gary Wang, testified against the erstwhile billionaire.

Read Next: Caroline Ellison Points Finger At FTX's Sam Bankman-Fried In Crypto Fraud Trial

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