Ross Ulbricht Loses $12M From a Pump.fun Memecoin After Inadvertently Triggering a Price Drop

Apparently, Ross Ulbricht suffered a $12 million loss from a Pump.fun memecoin when he inadvertently triggered a price drop while attempting to

Coin Edition, a cryptocurrency news site, has reported that Ross Ulbricht, the founder of the now-defunct darknet marketplace Silk Road, has lost a significant amount of money due to a memecoin price manipulation incident on the Solana blockchain.

According to the report, Ulbricht, who is currently trying to raise funds for his legal defense through the sale of Solana-based tokens, suffered the loss after attempting to provide single-sided liquidity on Raydium. However, due to an error in initializing the liquidity pool price, an MEV bot was able to instantly seize and sell a large portion of the token, resulting in a rapid price drop.

The incident began when 50% of the ROSS (Ross Ulbricht Fund) token supply was airdropped into Ulbricht’s Solana donation address. In an attempt to passively sell these tokens, he planned to add single-sided liquidity to the token on the Solana decentralized exchange (DEX).

However, instead of using Concentrated Liquidity Market Maker (CLMM) to provide this liquidity, which would have protected him from MEV bots, Ulbricht mistakenly used Raydium’s Constant-Product Market Maker (CPMM). This error allowed an MEV bot to quickly identify and exploit the opportunity.

The bot purchased a large amount of the token at a low price, then immediately sold it, making a profit of $600,000 and causing the token price to drop by 90%. As a result, Ulbricht lost around $12 million, with only 10% of the token supply remaining in a separate wallet that was using concentrated liquidity correctly.

Ross Ulbricht and Silk Road

Born in Austin, Texas, Ross Ulbricht is an American entrepreneur and convicted criminal who founded and operated Silk Road, an infamous darknet marketplace that sold illegal drugs, fake IDs, hacking tools, and other illicit goods.

Launched in February 2011, Silk Road quickly became a hub for buying and selling illegal substances, thanks to its anonymity (provided by Tor) and use of Bitcoin for transactions, which made it difficult for law enforcement to trace users.

At the height of its operations, Silk Road handled $1.2 billion in sales, earning Ulbricht an estimated $80 million in commissions. While the marketplace’s activities were illegal, it did help showcase Bitcoin’s potential as a digital currency.

Following an investigation by the FBI, Ulbricht was arrested in 2013 and charged with narcotics trafficking, computer hacking, and money laundering conspiracies.

In 2015, he was found guilty and sentenced to life in prison without the possibility of parole by Judge Katherine Forrest in Manhattan federal court. However, the Second Circuit Court of Appeals overturned his narcotics trafficking conviction and remanded the case for resentencing in 2017.

In January 2023, Ulbricht was pardoned by former President Donald Trump, putting an end to his life sentence for Silk Road crimes.

The pardon came after a years-long campaign by Ulbricht’s supporters, who argued that the sentence was excessively harsh and that he deserved a second chance. They also highlighted Ulbricht’s good behavior in prison and his efforts to help other inmates.

The pardon was also supported by several high-profile figures, including Elon Musk, who called Ulbricht’s sentence “stupid” and a “gross injustice.”

This article is for informational and educational purposes only. The虧損1200萬美元！Ross Ulbricht 嘗試提供單邊流動性時出現失誤，導致大量 memecoin 被 MEV bot 清算article does not constitute financial advice or advice of any kind.