BTC PULSE
  • News
    • Altcoins
    • Blockchain
    • Bitcoin
    • Ethereum
    • NFT
    • Regulation
    • WEB 3.0
  • Price Prediction
  • Learn
  • Events
  • Advertise
No Result
View All Result
Play Now
  • News
    • Altcoins
    • Blockchain
    • Bitcoin
    • Ethereum
    • NFT
    • Regulation
    • WEB 3.0
  • Price Prediction
  • Learn
  • Events
  • Advertise
No Result
View All Result
BTC PULSE
No Result
View All Result
Play Now
Home Blockchain

FTX and Alameda Likely Lost Millions when Binance was hacked for $570 million

by Abimbola Adu
Nov 23, 2022 - 12:00 am
in Blockchain
FTX and Alameda Likely Lost Millions when Binance was hacked for $570 million

 On November 22, 2022, Bitcoin enthusiast and on-chain data explorer Lucas Nuzzi posted a message on his Twitter page about Samuel Bankman Fried’s collapsed crypto business and how it was related to the $570 million Binance hack.

4/ Their approach was similar w.r.t ERC 20 tokens, which were also frequently sent cross-chain via bridges

They sent a total of $9.5 billion to bridges alone(!!!). We're still investigating the extent to which they might have lost user funds as a result of bridge hacks. pic.twitter.com/6RfamMUVxr

— Lucas Nuzzi (@LucasNuzzi) November 22, 2022

Late in the day, Lucas, who is also in charge of research and development at the well-known cryptocurrency asset analytic platform Coinmetric, made this information public.

He started his tweet by saying he and his colleagues at Coinmetric have been intrigued for many weeks about the way FTX and its sister company lost billions of dollars of users’ funds.

Further research led them to a possible reason: Alameda is a crypto platform that offers services like borrowing and lending and involves multiple ecosystem cross-chain bridges. 

On bridges alone, Alameda sent a whopping sum of $9.5 billion. Many bridges were attacked in the past year, and Alameda likely was affected. They are still unsure, though, of the exact financial hit the platform sustained from users.

According to their analysis, it was possible that when Terra crashed, both Alameda and FTX were severely low on liquidity. 

To save face, the platform decided to fall back on FTT, transferring it between themselves, and as long as the token kept doing well, they could borrow collateral-backed loans using FTT.

Before CoinDesk, a website that publishes news about cryptocurrencies published an article revealing FTT as FTX’s most prominent position and endangering the platform. This most likely took place for a while. 

According to their prognosis, a whale investor had been sending large amounts of USDT to save FTT from falling first to $23, then to $10; the investor is likely to be Alameda, and the funds used in propping up the price were likely users’ funds.

They also believed that the same user funds were used on FTT earlier that year, which is why it performed better than most assets.

When the Binance platform experienced a cross-chain exploit in October 2022, Alameda prop funds likely took part in the hit as Binance the exchange lost over $570 million in the attack.

However, that was not enough to wipe out all of the customers’ funds. Their hypothesis was that wrong trades were likely leveraged, stablecoin dominated lending markets, and cross-chain bridges meant either the native token lost value or it was hacked.

All these activities were possibly the leading factors that made FTX and Alameda lose a lot of user funds in early 2022, and when Binance was hacked, it lost millions of customers’ funds.

FTX was also hacked a day after it declared bankruptcy, losing over $600 million; however, many believed that it was the last move pulled by an insider before everything collapsed. 

Nevertheless, there is no concrete proof to support such a theory.

Tags: BinanceFTXHack
Abimbola Adu

Abimbola Adu

Abimbola Adu is a crypto content writer with a background in English studies. She is keen on enlightening others about cryptocurrency and blockchains. She enjoys writing poems and spending time with family.

Related Posts

Shanghai cityscape with overlaying blockchain icons representing its commitment to technological growth.

Shanghai Unveils Blueprint to Boost Blockchain Progress by 2025

September 27, 2023

Shanghai announces a comprehensive strategy targeting rapid blockchain evolution by 2025, aligning with China's support for domestic blockchain...

A graph showcasing the decline in Binance's market share in 2023.

Binance’s Non-Dollar Exchange Market Share Dips by 25%

September 27, 2023

Binance's dominance in non-dollar crypto exchanges takes a hit, dropping 25% since January 2023, facing challenges from competitors...

Aerial view of Tecpetrol's new crypto mining setup, surrounded by the vast landscapes of Argentine Patagonia.

Argentinian Oil Giant Tecpetrol Turns to Crypto Mining Using Excess Gas

September 27, 2023

Tecpetrol ventures into cryptocurrency mining by converting excess gas into energy, setting an example in both sustainability and...

Binance CEO CZ engaged in a discussion regarding the recent HTX hack.

CZ Appoints Binance Security Team to Track Huobi HTX Stolen Funds

September 26, 2023

Binance's CZ extends a helping hand to Huobi HTX after a hack drained $8 million from the exchange....

Press Releases

David Ferrucci next to the Elemental Cognition brand emblem.

BM Watson’s Lead Developer Secures $60M for New AI Venture, Elemental Cognition

August 18, 2023

David Ferrucci, has raised a remarkable $60M for his AI startup. The company brings forward two pioneering chatbot solutions designed...

pulse5

Amsterdam Gets with the Dutch Blockchain Days the Biggest Event of the Benelux in the Field of Blockchain, Crypto Currencies, NFTs and Other Web3 Developments

May 8, 2023

Discover the future of blockchain, crypto, NFTs, and Web3 at Dutch Blockchain Days, the largest event in Benelux.

pulse4

Korea Blockchain Week 2023 Set to Push the Boundaries after Record-Breaking 2022 Event

May 8, 2023

Korea Blockchain Week 2023 returns after a highly successful 2022 event, featuring leading experts and the latest trends in blockchain...

pulse3

Istanbul Will Be Hosting Eurasia’s Largest Blockchain Event Once again on May 8–11, 2023

May 8, 2023

Join Eurasia's largest blockchain event, the Blockchain Economy Istanbul Summit, May 8-11, 2023, and discover the future of financial technology.

View All
BTC-Pulse LogoTransparent

© 2023 BTC-PULSE. Disclaimer: The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

News

  • Altcoins
  • Bitcoin
  • Ethereum
  • NFT
  • Regulation
  • WEB 3.0

Info

  • Learn
  • Price Prediction
  • Events
  • Press Releases
  • Sitemap

Company

  • About Us
  • Terms of Service
  • Privacy Policy
  • Contact Us
  • Advertise

©2023 BTC-PULSE – All right Reserved.

No Result
View All Result
  • News
    • Altcoins
    • Blockchain
    • Bitcoin
    • Ethereum
    • NFT
    • Regulation
    • WEB 3.0
  • Price Prediction
  • Learn
  • Events
  • Advertise