- Alameda Research, a crypto hedge fund, suffered significant losses, at least $190 million due to preventable security exploits.
- Former engineer Aditya Baradwaj criticized Alameda’s fast-paced approach, which led to frequent security lapses.
- A trader lost over $100 million by clicking on a phishing link promoted on Google Search.
According to former engineer Aditya Baradwaj, crypto hedge fund Alameda Research lost at least $190 million in arguably preventable exploits due to lax security practices.
In a recent tweet thread, Baradwaj said Alameda’s “breathtaking” agility led to major security lapses every few months on average.
He cited an incident where a trader lost over $100 million after clicking a phishing link promoted on Google Search. In another event, questionable DeFi yield farming resulted in losses surpassing $40 million.
Baradwaj blamed Alameda’s ethos of moving fast
Baradwaj blamed Alameda’s ethos of moving fast, ignoring industry security and accounting standards. Funds were stored in plain text files accessible to multiple staff members.
This leaked key file enabled a hacker to steal more than $50 million from Alameda’s exchange wallets. Baradwaj suggested numerous other million-dollar exploits occurred.
The whistleblower’s revelations come as former CEO Caroline Ellison testifies against founder Sam Bankman-Fried in FTX’s criminal fraud trial.
The security lapses further support allegations of haphazard management and questionable decision-making under Bankman-Fried’s leadership.
While fast-paced crypto trading demands flexibility, Alameda’s lax controls proved hugely costly. The easily avoidable mistakes highlight glaring negligence for a firm handling such massive customer funds.