Ross Ulbricht, the notorious founder of Silk Road, recently made a costly mistake that led to a loss of $12 million in just a few seconds.
Ross Ulbricht Suffers Loss While Providing Liquidity to Raydium
Convicted in 2015 for money laundering and drug trafficking, Ulbricht was pardoned by Donald Trump 11 years later. During this period, he received continuous support from the crypto community, which created the ROSS cryptocurrency, distributing 50% of the token supply to him. This process contributed to the $12 million loss experienced by Ulbricht.
ROSS Token Price Plummets by 90%
According to Arkham Intelligence, while attempting to liquidate the tokens on January 29, Ulbricht or the wallet controller made two separate transactions. However, a critical error resulted in the creation of a Constant Product Market Maker (CPMM) pool instead of a Concentrated Liquidity Market Maker (CLMM). This mistake caused the ROSS tokens to trade at disadvantageous prices, resulting in Ulbricht losing $12 million and significantly impacting the token’s price.
MEV Bot Profits from Ulbricht's Error
The first transaction from Ulbricht’s account became an opportunity for a Maximum Extractable Value (MEV) bot. The bot spent approximately $556 to purchase 398.6 million ROSS tokens, later selling them for 2,669 SOL, resulting in nearly $600,000 in profit. This incident highlights the high-risk nature of crypto trading and the complexities involved that traders must consider. Currently, the ROSS token trades at $0.0005209, experiencing a 55% decrease in the weekly chart. However, the trading volume has consistently increased, reaching $508.27 thousand, drawing the attention of traders.
This incident illustrates how technical errors in crypto markets can lead to significant financial losses. It emphasizes the need for traders to remain vigilant and understand market dynamics thoroughly.
