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Ross Ulbricht's $12M Crypto Blunder: Silk Road Founder's Meme Coin Misstep

Coin WorldThursday, Jan 30, 2025 4:02 pm ET

1min read

Ross Ulbricht, the founder of the Silk Road, recently faced a significant loss on the Pump.fun platform due to the exploitation of ROSS token liquidity by a MEV bot. Ulbricht, who was pardoned by former President Donald Trump, received substantial donations of ROSS tokens to aid in his reintegration into society. However, his attempt to liquidate these tokens on Pump.fun resulted in a $12 million loss.

According to blockchain analysis firm Arkham Intelligence, Ulbricht's misstep occurred when he initialized the ROSS liquidity pool at the wrong price, causing an MEV bot to take and sell the tokens instantly. This initial sale used only 5% of the total token supply, but Ulbricht's subsequent attempt to liquidate 35% of the tokens caused the price to drop by 90%. As a result, he received only $600,000 for assets worth $12 million.

The crypto community reacted sympathetically to Ulbricht's loss, acknowledging his historical role in introducing Bitcoin to early adopters through the Silk Road. While many still question the extent of his imprisonment, the incident highlights the evolving risks associated with modern DeFi practices compared to the earlier days of Bitcoin use.

Ulbricht still retains 10% of his original ROSS token allocation, which is now worth substantially less than anticipated. This stark reality serves as a reminder of the risks associated with meme coins and the steep learning curve for even seasoned crypto aficionados. As the crypto landscape continues to shift, trader education and strategic planning will be essential for navigating the chaotic terrain effectively.

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