The liquidators of Alameda Research have reportedly incurred at least $11.5 million in losses since taking control of Alameda’s trading accounts.On Jan. 16, a Twitter thread from Arkham Intelligence reported that one wallet under the control of liquidators has seen a string of “significant losses” due to liquidations, some of which were “preventable losses.”Over the past two weeks being under Liquidator control, the account incurred significant losses:Largest single liquidation: $4.85MTotal liquidated amount: $11.5MPreventable losses: $4M+— Arkham (@ArkhamIntel) January 16, 2023
As one example, Arkham noted that the account ending 0x997 initially had a short position of 9,000 Ether (ETH) ($10.8 million) against the collateral of $20 million in USD Coin (USDC) and $4 million in Dai (DAI), with a net balance of $15.2 million when the liquidators first took control.After a string of liquidations spanning almost two weeks however, the account’s current value now stands at “$1.1M short Ether against $1.4M USDC: net balance of $300K.”Arkham said this is the most recent development in a “series of market movements that have busted multiple Alameda positions left open after bankruptcy.”Another liquidation occurred when Alameda wallets removed $7 million in USDC and $4 million in DAI from the decentralized crypto lending platform AAVE to a separate Optimism L2 account on Dec. 29, around 30 hours after liquidators began moving assets out of Alameda wallets.This removal of funds is believed to have placed the position at a high risk of liquidation, resulting in $11.4 million of USDC being sold off to liquidation bots on Optimism, while the AAVE Treasury took another $100,000 in USDC as liquidation tax. Arkham explained that if liquidators had used a function to immediately close the position by selling off collateral instead of pulling collateral from the wallet, at least $15 million could have been preserved rather than the recovered $11 million. This thus amounted to $4 million in preventable losses. Related: Alameda Research had a $65B secret line of credit with FTX: ReportOn Jan. 13, EdaFace reported that Alameda Research liquidators lost $72,000 in digital assets while consolidating funds into a single wallet on the decentralized finance (DeFi) lending platform Aave. The liquidators attempted to close a borrow position but mistakenly removed extra collateral, putting the assets at risk of liquidation. Over a period of nine days, the loan was liquidated twice resulting in a total loss of 4.05 Wrapped EdaFace (WBTC) which will not be able to be recouped by creditors.
