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.

Recently pardoned Silk Road creator Ross Ulbricht lost $12 million in his crypto wallets after making a memecoin trading mistake, according to blockchain analytics firm Arkham Intelligence.

Multiple wallets linked to Ulbricht, or a user operating his wallets, “accidentally nuked the price” of a fan-made memecoin named ROSS, created after Ulbricht’s release from prison, while attempting to provide liquidity on decentralized exchange (DEX) Raydium, Arkham said in a Jan. 30 X post.

“We noticed that Ross's wallets lost $12M+ in a memecoin (ROSS) trade. 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 in the post.

The tokens were made available for trading at a lower price, which the 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, 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),” Arkham said.

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.

However, DEX Screener showed that ROSS was trading at around 1 cent and was up about 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. 50% of the ROSS supply was sent to Ulbricht’s Solana donation address by the developer.

Even after losing 40% of the supply, the wallet addresses still hold 10% of the Ross token supply, which is worth around $200,000, according to 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 Ulbricht on Jan. 22, fulfilling one of his crypto-focused campaign promises.