An MEV bot exploited the mispricing, acquiring and reselling ROSS tokens for profit.
Following the bot’s actions, the ROSS token plummeted by 90%, though it rebounded by 700% over the past day.
The wallets involved in the incident are tied to FreeRoss.org, a campaign advocating for Ulbricht’s release.
As per data on blockchain analytics firm Arkham Intelligence, crypto wallets associated with Silk Road creator Ross Ulbricht have lost a massive $12 million after a meme coin trading mistake. recently pardoned Unbricht’s prison term a day after joining the White House office.
Silk Road Creator Ross Ulbricht’s Fan Token Volatility
This led to the creation of a fan-based meme coin ROSS after the Silk Road creator, riding on the current sectorial wave. However, in an X post on January 30, Arkham noted that Ulbricht, or someone managing his wallets, inadvertently caused a sharp drop in the price of ROSS while attempting to provide liquidity on the decentralized exchange Raydium. The blockchain analytics firm :
“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”.
“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”.
The ROSS meme coin was immediately available for trading at a lower price which a maximal extractable value (MEV) bot quickly purchased and resold for profit. MEV bots execute the trade automatically while hunting lucrative opportunities in the market.
According to Arkham, the wallet linked to Ulbricht repeated the same error, resulting in an additional loss of $10.5 million, or roughly 35% of the token’s supply. “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.
MEV Bot Profits as ROSS Token Crashes 90%
A maximal extractable value (MEV) bot reportedly sold off mispriced ROSS tokens for over $600,000, as per the data from Arkham Intelligence. This action caused the fan-made token to plummet by 90%, as the bot capitalized on the mispricing and dumped the acquired tokens.
Despite the crash, data from DEX Screener indicates that ROSS is currently trading at around $0.01, marking a 700% increase over the past day. the wallets flagged by Arkham now appear as donation addresses on FreeRoss.org, a campaign led by Ross Ulbricht’s family advocating for his release from prison. Interestingly, the Solana donation addresses for Ross Ulbricht had received 50% of the ROSS token supply from the developer.
Even after losing 40% of the token’s supply due to trading errors, Arkham reported that the flagged wallets still retain 10% of the ROSS supply, valued at approximately $200,000.