- A trader lost over US$700K in a single swap on Uniswap V3, converting US$732K USDC to only US$19K USDT, likely due to a sandwich attack.
- An MEV bot drained liquidity and tipped a block builder to front-run the victim’s transaction, with all wallets showing unusual, similar paths.
- Some experts suspect these irregular swaps may be a money laundering mechanism rather than mere bad luck.
This is one of those stories in crypto where it may have been extremely bad luck and the victim is having a terrible day, or something very fishy is happening, which is not uncommon in this industry.
Onchain data has revealed a staggering loss in a single cryptocurrency swap: a trader exchanged over US$732,000 (AU$1.1M) in USDC for just about US$19K (AU$30K) in USDT.
The transaction was conducted on Uniswap V3’s highly liquid USDC–USDT pool, and it appears to have been manipulated by a sandwich attack —a tactic in which an attacker places transactions both before and after a victim’s order to force an unfavorable price movement.
According to X user The DEFiac, all wallets follow the same path, which is “unusual”.
The interesting part here is how did the funds travel before each of the sandwiched txs. All wallets follow the same path, which is rather long and quite unusual.
The DEFiacIn this case, an MEV bot is believed to have front-run the trader’s transaction by draining liquidity from the pool, creating a massive price discrepancy between two stablecoins that are usually pegged to one US dollar.
The bot also tipped a block builder to ensure its transaction was processed ahead of the victim’s.
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What Happened?
Adding another layer of intrigue, some observers have speculated that these unusually poor swap outcomes might not be accidental.
DefiLlama developer Oxngmi noted on social media that similar “bad swaps” could be a money laundering mechanism. Oxngmi said:
So you have a bunch of single-use addresses passing money to one another in weird ways that are hard to track for software. A normal user would instead simply transfer the USDC directly among addresses instead of doing all this weird complicated shit. And then someone who uses such complex defi/address flows makes such a basic mistake to get mevved for a full loss? llama finds it very unlikely.
OxngmiIn one notably extreme instance highlighted by TheDEFIac, a trader exchanged over US$220K (AU$347K) in USDC for just around US$5K in USDT (AU$7.91), intensifying suspicion that these losses might not have been accidental.
Related: Experts Say Crash Far from Done, BTC Headed for $70K: Bull Run Over?
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