FTX’s sister hedge fund, Alameda Research, lost at least $190 million of its trading funds due to arguably avoidable scams, according to a former engineer at the firm.
In an Oct. 12 post to X titled “The Hacks,” former Alameda Research engineer turned whistleblower Aditya Baradwaj claims that the firm’s “breathtaking” agility led to “major security incidents” as often as every few months.
Incident #1:
An Alameda trader got phished while trying to complete a DeFi transaction by accidentally clicking a fake link that had been promoted to the top of Google Search results
Cost: $100M+
Postmortem: Implemented extra checks on our internal wallet software
In an example of one of the biggest exploits, Baradwaj claims a trader at Alameda once lost more than $100 million of the firm’s funds after clicking a malicious link promoted to the top of Google Search results.
The trader was attempting to sign off on a decentralized finance transaction, said Baradwaj.
In another example, he said Alameda was yield farming on a new blockchain of “questionable legitimacy” — a move that saw the trading firm eventually rack up losses of more than $40 million.
Baradwaj wrote that FTX founder Sam Bankman-Fried believed that the “single most important thing” for Alameda and FTX was their ability to move quickly. This ethos led to Alameda routinely ignoring industry-standard engineering and accounting practices for such firms, he said.
“This meant virtually no code testing and incomplete balance accounting. Safety checks for trading would only be added on an as-needed basis,” wrote Baradwaj.
“Blockchain private keys and exchange API keys were stored in plaintext in a file that several employees could access.”
This led to another security incident that cost the firm millions after an old version of the plaintext files containing keys to Alameda’s wallets were leaked.
The attacker transferred funds out of “some exchanges,” and the incurred losses tallied up to more than $50 million, explained Baradwaj.
These are just a few incidents – there’s many more, including from before my time at the company.
FTX had its own issues, including the MobileCoin fiasco that Gary recently testified about during the trial.
He said that Alameda suffered through “many more” incidents of similar scope to the ones he’d described, but many of these were before his time at the company.
Baradwaj’s comments come amid former Alameda CEO Caroline Ellison taking the stand to testify against Bankman-Fried on the sixth day of his fraud trial. In the preceding days, a number of former colleagues, including Adam Yedidia and Gary Wang, have brought a wealth of new evidence against the former billionaire.
Vincent Anthony Mazzotta Jr has pleaded guilty to money laundering and conspiracy to obstruct justice, which together carry a maximum of 15 years in prison.
If passed, the legislation could give more weight to a US housing regulatory agency’s June order to consider certain digital assets for mortgage loan risk assessments.
British Palestinians have called Sir Keir Starmer’s decision to recognise Palestine as a state if Israel does not abide by conditions “absurd and performative” – and will not allay concerns about people in Gaza.
After recalling his cabinet ministers from parliamentary recess on Tuesday, the prime minister said the UK will recognise a Palestinian state by September if Israel agrees to end the “appalling situation in Gaza”.
The British Palestinian Committee (BPC), which represents the experiences of Palestinians in the UK, sent Sir Keir a letter ahead of the meeting urging him to take actions they said could make a real difference to people in Gaza.
They had urged him to not recognise Palestine as a state without taking measures to “end the genocide” in Gaza, calling it “symbolic” and said it “must not be used to deflect from accountability”.
After Sir Keir announced his plan to recognise Palestine, Dr Sarah Husseini, BPC director, told Sky News the plan is “absurd while Israel continues to exterminate and starve women, men and children”.
She added: “What is needed is urgent accountability for the genocide in Gaza and an end to UK military support to the state committing these crimes.
“This performative announcement does little to allay the concerns of Palestinians in this country. It will not relieve the government of its legal duties, and it will not silence the calls from the British public to end British complicity in the atrocities being livestreamed to their phones.”
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2:39
Sky News on board Gaza aid plane
The war has now been going on for 21 months after it was sparked by Hamas militants killing 1,200 Israelis and taking 250 hostages on 7 October 2023. The militant group still holds 50 hostages, of whom only 20 are believed to be alive.
He has also refused to say whether “genocide” is taking place in Gaza – a claim Israel has vehemently denied.
Israel paused fighting in three areas for another 10 hours today to help aid distribution, the third day it has done so amid mounting international condemnation of the scenes of hunger unfolding in Gaza.
David Mencer, a spokesperson for the Israeli government, said: “There is no intent, (which is) key for the charge of genocide… it simply doesn’t make sense for a country to send in 1.9 million tonnes of aid, most of that being food, if there is an intent of genocide.”
Israel also rejected Sir Keir’s plan and accused him of pandering to his MPs and the French.
The Israeli foreign ministry said: “The shift in the British government’s position at this time, following the French move and internal political pressures, constitutes a reward for Hamas and harms efforts to achieve a ceasefire in Gaza and a framework for the release of hostages.”
Image: The BPC said the UK could take immediate steps to help starving Gazans. Pic: Reuters
In the BPC’s letter, it had said the government has “not only a political and moral obligation, but a legal obligation” to take three steps.
They are:
• Preventing and punishing Israel’s “genocide” in Gaza and to end “all complicity in it”
• Apply “immediate and comprehensive sanctions on Israel”
• Safeguard the rights to freedom of expression and assembly in the UK
More specifically, the group called on Sir Keir to end “all forms of military collaboration, urgently review all public contracts to ensure they are not aiding unlawful occupation or genocidal acts, and support universal jurisdiction mandates”.
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22:05
Has Trump broken from Netanyahu over Gaza?
The group said these steps would help towards ending the starvation crisis in Gaza, which it said had been made possible “due to the impunity granted to” Israel and “compounded by the active military, economic and diplomatic support from states such as the UK”.
They also accused the UK government of introducing “draconian legislation to limit the rights” of British citizens campaigning to end the atrocities “and British complicity in those atrocities”.