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Wallets tied to recently freed Silk Road creator Ross Ulbricht listed tokens at the wrong price, which were then snapped up by a bot.
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Crypto wallets tied to recently pardoned Silk Road creator Ross Ulbricht lost $12 million after making a memecoin trading mistake, says blockchain analytics firm Arkham Intelligence.
Ulbricht, or a user operating his wallets, “accidentally nuked the price” of a fan-made memecoin created after Ulbricht’s release from prison called ROSS while trying to provide liquidity on the decentralized exchange (DEX) Raydium, Arkham said in a Jan. 30 X post.
“Because he initialized the liquidity pool at the wrong price, $1.5M of the token (5% supply) was instantly taken by a MEV Bot, then sold into the existing pool,” Arkham explained.
Source: Arkham
The tokens were instantly available for trading at a lower price, which a maximal extractable value (MEV) bot bought immediately and sold for a profit. MEV bots scan for profitable opportunities and can quickly and automatically execute trades.
The Ulbricht-tied wallet then made the same mistake again, this time losing another $10.5 million, or roughly 35% of the supply, Arkham said.
“Ross tried to add single-sided liquidity to sell the coins off passively, but accidentally created a pool with Raydium CPMM, Constant-Product Market Maker, instead of CLMM Concentrated Liquidity Market Maker,” Arkam said.
Related: Roger Ver’s Trump pardon plea: ‘Lawfare’ victim or tax evader?
The MEV bot sold off the tokens for over $600,000, according to Arkham. ROSS crashed 90% as a result of the bot snapping up the mispriced tokens and dumping them.
DEX Screener shows ROSS is trading around 1 cent and is up around 700% over the last day.
Both the wallet addresses flagged by Arkham are listed for donation on FreeRoss.org, a campaign run by Ulbricht’s family to free him from prison. Ulbricht’s Solana donation address received 50% of the ROSS supply from the developer.
Even after losing 40% of the supply, Arkham said the wallet addresses still hold 10% of the Ross token supply worth around $200,000.
Despite losing nearly all of the gifted tokens, the wallet address connected to Ulbricht still holds 10% of the supply. Source: Arkham
Ulbricht ran the online black market Silk Road, which used Bitcoin for its payments, until 2013, when he was arrested and sentenced to a double life sentence plus 40 years in 2015.
US President Donald Trump pardoned him on Jan. 22, making good on one of his crypto-focused campaign promises.
This article first appeared at Cointelegraph.com News
