Alameda liquidators lost $72,000 worth of crypto while trying to recover funds, per a report from Arkham Intelligence. These assets will no longer be recoverable for creditors. The restructuring team has retrieved $5 billion worth of liquid assets so far, attorneys said on Wednesday. Loading Something is loading.
Thanks for signing up!
Access your favorite topics in a personalized feed while you’re on the go.
It hasn’t been easy for the team overseeing FTX’s bankruptcy to recover funds to pay back the failed exchange’s many creditors.
The latest hiccup? Getting turned around in a decentralized finance protocol that resulted in the accidental loss of $72,000 that can no longer be used to pay anyone back.
“There were some embarrassing on-chain faux pas’s committed by the operators,” a report from blockchain analytics firm Arkham Intelligence said.
Essentially, liquidators have been trying to consolidate assets from Alameda into a single wallet to simplify managing its holdings. As the team was trying to move funds and exit positions, they accidentally liquidated themselves on Aave, a DeFi lending protocol.
DeFi protocols allows users to borrow and loan tokens without centralized intermediaries. These platform and tools are often difficult to navigate because they have poor user interface design and haven’t been tested at a large scale.
“When positions are forcibly closed on AAVE, a penalty is also slashed from the liquidated collateral,” Arkham Intelligence said.
Around $1.4 million worth of tokens have been returned to the central wallet from various Alameda wallets over the past two weeks. The wallet holds around $19.6 million worth of ether and $140 million of various other cryptocurrencies, The Block reported Thursday.
“The liquidators would benefit from having a DeFi expert to advise on the mechanics of closing Alameda DeFi positions and retrieving as much money as possible,” Zachary Lerangis, head of operations at Arkham, told news outlet Decrypt.
FTX’s restructuring team has recovered $5 billion worth of liquid assets so far, company attorneys announced on Wednesday. This figure doesn’t include any illiquid assets.