Alameda Research wallet receives $13M from Bitfinex, other sources

Nearly $13 million has been moved into the consolidation wallet of bankrupt crypto trading firm Alameda Research in just 24 hours, data from blockchain security firm PeckShield revealed on Feb. 2.

The address received $6 million in Tether (USDT) and $2.5 million in Ether (ETH) from the hot wallet of crypto exchange Bitfinex, along with $4.5 million worth of USD Coin (USDC) from an anonymous source and 30,000 Lido tokens worth roughly $65,500.

#PeckShieldAlert ?$13M worth of cryptos have been transferred to Alameda consolidation-labeled address, including ~6M $USDT & 1,545 $ETH ($2.5M) from Bitfinex, ~4.6M $USDC from 0x7889
Wondering why Bitfinex transferred ~$8.5M worth of cryptos to Alameda consolidation address pic.twitter.com/YU8RNcrdxs

— PeckShieldAlert (@PeckShieldAlert) February 2, 2023

The asset’s transfer is reportedly part of recovery efforts tied to bankruptcy proceedings. A spokesperson for Bitfinex told Cointelegraph that Alameda had an account on Bitfinex and that the exchange is collaborating with the liquidators to refund the remaining funds.

Alameda filed for bankruptcy protection on Nov. 11, along with nearly 130 other companies controlled by FTX Group. Since then, its consolidation wallet has seen inflows from several addresses, accumulating over $26 million in ETH and $183 million in other altcoins, including $54 million in BitDAO tokens.

The amount recovered, however, could be much larger, as liquidators have reportedly suffered at least $11.5 million in losses — some of which were preventable — since taking control of Alameda’s trading accounts, according to a report from crypto analytics firm Arkham Intelligence.

Liquidators faced another technical obstacle when attempting to recover funds on Jan. 12. Cointelegraph reported the loss of $72,000 worth of digital assets on the decentralized finance (DeFi) lending platform Aave while liquidators attempted to consolidate funds into a single multisignature wallet.

To close a borrow position on Aave, the liquidators removed extra collateral, putting the assets at risk of liquidation. In addition, liquidators are also reported to have spent far more on gas fees than they earned from moving the funds.

Alameda Research nearly collapsed in 2018 before FTX came into play, according to new reports citing former employees. The firm’s algorithm was designed to make a large number of automated, fast trades but was inefficient in predicting price movements.