• Alameda Research liquidators lost $72,000 worth of digital assets on the decentralized finance (DeFi) lending platform Aave while trying to consolidate funds into a single multisignature wallet.
• The liquidators attempted to close a borrow position on Aave but instead removed extra collateral used for the position, putting the assets at risk of liquidation.
• Arkham reported that over nine days, the loan was liquidated twice for a total of 4.05 Wrapped Bitcoin (WBTC), which creditors will now not be able to recoup.
The liquidators of Alameda Research have been facing difficulties in their attempts to reclaim funds for creditors. Recently, analytics firm Arkham released a statement on social media that the liquidators had lost around $72,000 worth of digital assets while attempting to consolidate funds into a single multisignature wallet on the decentralized finance (DeFi) platform Aave.
The loss occurred when the liquidators were trying to close a borrow position on Aave, but instead removed the extra collateral used for the position. As a result, the assets were put at risk of liquidation. Arkham reported that over nine days, the loan was liquidated twice for a total of 4.05 Wrapped Bitcoin (WBTC), which creditors will now not be able to recoup.
In addition to this loss, Arkham also reported that around $1.4 million of tokens had been steadily returned to the central multisignature wallet from scattered Alameda wallets. However, significant sums of capital still remain stranded in over 50 Alameda wallets, the largest of which is worth over $14 million.
The liquidators of Alameda Research have faced several other issues in their attempts to recover funds. Earlier this month, the team reported that a hacker had stolen around $8 million worth of digital assets from their wallets. The hacker had exploited a vulnerability in the DeFi protocol bZx, which allowed them to access the funds.
The team has also faced criticism from creditors and members of the DeFi community for their handling of the liquidation process. Some have accused the liquidators of mismanaging the funds and not doing enough to ensure that creditors are compensated for their losses.
It remains to be seen how the liquidators will manage to recover the remaining funds for creditors and what measures they will take to prevent similar issues from occurring in the future. In the meantime, the liquidators are continuing to work hard to ensure that creditors are not left with a huge financial loss.