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. 

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.

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