{"id":71742,"date":"2023-10-12T06:49:50","date_gmt":"2023-10-12T10:49:50","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/alameda-research-lost-200m-to-several-phishing-attacks-due-to-poor-security-practices-ex-ftx-engineer\/"},"modified":"2023-10-12T06:49:53","modified_gmt":"2023-10-12T10:49:53","slug":"alameda-research-lost-200m-to-several-phishing-attacks-due-to-poor-security-practices-ex-ftx-engineer","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=71742","title":{"rendered":"Alameda Research Lost $200M to Several Phishing Attacks Due to \u201cPoor Security Practices\u201d: Ex-FTX Engineer"},"content":{"rendered":"
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Former Alameda Research software engineer Aditya Baradwaj has exposed several security flaws that reportedly caused the FTX\u2019s sister hedge fund at least a staggering $200 million.<\/p>\n

In a series of posts on X (Twitter), titled \u2018The Hacks,\u2019 the whistleblower revealed, \u201cpoor security practices at Alameda Research caused the company to lose hundreds of millions of dollars.\u201d<\/p>\n

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Baradwaj\u2019s posts come at a time when the beleaguered ex-FTX CEO Sam Bankman-Fried (SBF) is undergoing his six-week-long criminal trial in lower Manhattan.<\/p>\n

Per Baradwaj\u2019s claims, the disgraced crypto mogul SBF believed that it is important to move very fast for startup like Alameda, \u201cso much so that he decided to ignore engineering and accounting practices that are considered standard at tech companies and financial services firms.\u201d<\/p>\n

The company\u2019s security was questionable as safety checks for trading would only be added on as needed basis, Baradwaj added.<\/p>\n

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\u201cBlockchain private keys and exchange API keys were stored in plaintext in a file that several employees could access.\u201d<\/p>\n<\/blockquote>\n

Security Incidents<\/h2>\n

He continued giving instances of some of the major security breaches that Alameda witnessed once in every few months.<\/p>\n

In one incident, Baradwaj claimed that an Alameda trader fell victim to a phishing attack while trying to complete a DeFi transaction. He apparently clicked a fake link that had been promoted to the top of Google Search results, losing more than $100 million.<\/p>\n

Another alarming incident took away $40 million in yield farming on a new blockchain of questionable legitimacy. \u201cThe creator ended up holding our funds hostage, and we had months of prolonged negotiations,\u201d he wrote.<\/p>\n

Yield farming refers to earning yield by placing coins or tokens in a decentralized application (dApp), thus providing liquidity to various token pairs. However, malicious actors fake the dApp, blocking withdrawals after attempting to amass sizable amount of funds.<\/p>\n

In yet another security breach, blockchain private keys stored in plaintext were leaked by an ex-employee. The insider leak cost over $50 million loss, he added.<\/p>\n

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\u201cThese are just a few incidents – there’s many more, including from before my time at the company.\u201d<\/p>\n<\/blockquote>\n

Frauds Were Intentional<\/h2>\n

Alameda\u2019s ex-CEO and SBF\u2019s former girlfriend Caroline Ellison recently disclosed her powerful testimony against SBF, admitting that he was \u201cvery ambitious\u201d risktaker, mishandling customer funds for his own ideals.<\/p>\n

She also said that Bankman-Fried said there was a \u201c5% chance that he would become the President of the United States.\u201d<\/p>\n

Ellison disclosed Sam\u2019s investment choices were intentional, that led to his pursuit of funding from the Saudi Prince and plotting against Binance.<\/p>\n

Baradwaj has been highly vocal on various frauds committed by both Alameda and FTX in recent times. He said he lost more than 90% of his liquid assets when FTX collapsed in November 2022.<\/p>\n

However, SBF has pled not guilty to the charges brought against him and throughout his trial, maintains innocence.<\/p>\n<\/p><\/div>\n