Ross Ulbricht’s Liquidity Mistake Costs Millions

A $12 million loss has been reported from crypto accounts associated with Ross Ulbricht, the recently pardoned founder of Silk Road, as a result of a costly trading error.

Arkham Intelligence, a blockchain analytics firm, detailed the incident, which arose when an attempt to provide liquidity for the memecoin ROSS bungled, enabling an automated trading program to exploit the error.

Ulbricht’s supporters introduced the ROSS token as a tribute following his parole. Nevertheless, the transaction was misconfigured when liquidity was incorporated into the decentralized exchange Raydium. Consequently, an algorithm identified the mispricing and promptly acquired $1.5 million in tokens, which accounted for approximately 5% of the total supply, before reselling them for a profit.

Instead of overcoming the setback, an additional attempt was made, but the same error was repeated on a larger scale. This time, the algorithm acquired an additional $10.5 million in tokens, which is equivalent to 35% of the supply. The price of ROSS plummeted by 90% as a result of the unexpected influx of available tokens.

Ulbricht-associated accounts continue to possess a portion of the remaining tokens, equivalent to approximately $200,000 in value, despite the substantial losses. A campaign dedicated to his cause, FreeRoss.org, is listing the affected wallets for donations.

Until his arrest in 2013, Ulbricht, the former mastermind behind Silk Road, maintained the Bitcoin-powered dark web marketplace. In 2015, he was sentenced to multiple life terms. However, on January 22, former U.S. President Donald Trump granted him clemency, fulfilling a long-standing campaign pledge associated with the crypto community.

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