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Over a month has passed since FTX filed for bankruptcy under the Chapter 11 Bankruptcy Code. Alameda Research, sibling trading firm of the crypto exchange, was reported to be gathering cash prior to the mishap. Recent statement of Bitgo CEO confirms the instance and he also stated the attempt remained unsuccessful.
Bitgo chief executive officer, Mike Belshe, joined the defi researcher Chris Blec’s Twitter Spaces on 14th December. Belshe said the trading firm tried to redeem its 3,000 Wrapped Bitcoin (wBTC) some time earlier than FTX filing for bankruptcy.
The CEO explained that the digital asset trust company rejected the reclamation request of Alameda Research seeking to gain access to wBTC. However, the representative from the firm could not pass the security verification process. Additionally, he seemed to not know about the process of wBTC burning, Belshe added.
According to Belshe, the security details shared by the representative were not aligned with the process. This made the transaction put on hold as it was nothing like the burn. In addition, the person’s identity was not known.
This made the process put on hold and at the time when it was on hold, the Bitgo employees were looking for the response. However, the wait continued and the firm along with FTX filed for bankruptcy on November 11th. Given the collapse everything halted since then.
Following this, the request of mint BTC got stuck over the platform and it is likely to remain in the same state until the current issue gets resolved.
The Ethereum transaction aggregator Etherscan also validated Alameda’s attempt to unwrap the 3,000 wBTC.
While normally this would have resulted in the redemption of BTC, Bitgo had a security measure in place prior to the conversion, which Alameda failed to implement.
It is unclear why the $50 million worth of wBTC were attempted to be redeemed, but it is known that FTX executives were working up until the very last minute to find money from a number of sources to avoid bankruptcy.
On November 25, according to an analysis by Arkham Intelligence, Alameda took $204 million from FTX and sent it to eight separate addresses.
US five days before to its parent company actually filing for Chapter 11 bankruptcy.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
