Silk Road’s Ulbricht Loses $12M in Scam

 
Kritika Mehta
Written By 
Kritika Mehta
January 30, 2025

Silk Road founder Ross Ulbricht, or someone with access to his wallets, lost $12 million. The mishap happened as he ettempted to provide liquidity for a memecoin on Solana, which is Pump.Fun, according to blockchain analytics firm Arkham Intelligence.

Silk Road’s Ross Ulbricht Scammed

“ROSS ULBRICHT LOST $12M ON PUMPFUN,” Arkham posted on X, detailing how Ulbricht mistakenly initialized a liquidity pool at the wrong price, allowing a Maximal Extractable Value (MEV) bot to exploit the situation.

“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 stated. “Then he did it again and he lost another $10.5M. (35% supply).”

The incident involved the ROSS token, a Solana-based memecoin tied to the Ross Ulbricht Fund. Arkham reported that Ulbricht’s Solana donation address received 50% of the token’s total supply from the developer last week.

Attempting to sell off the tokens gradually, Ulbricht “tried to add single-sided liquidity to sell the coins off ively, but accidentally created a pool with Raydium MM (Constant-Product Market Maker) instead of CLMM (Concentrated Liquidity Market Maker),” Arkham explained.

This mistake allowed an MEV bot to seize and sell the tokens, profiting over $600,000 while triggering a massive price drop. “The MEV Bot that took the coins managed to sell them off for over $600K, sending the price down -90% in the process,” Arkham reported.

Despite losing 40% of the token’s supply, Ulbricht still retains a portion of the holdings. “Ross still holds 10% of the token in a separate address, with LP correctly added on Raydium Concentrated Liquidity. (currently worth ~$200K),” Arkham noted.

Ross Ulbricht, the founder of Silk Road, is currently serving a double life sentence without parole for operating the darknet marketplace. The ROSS token incident is the latest development involving his name in the crypto space.

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Kritika Mehta
Written by Kritika Mehta

Kritika boasts over two years of experience in financial news and is currently a crypto journalist at CryptoNewsZ. She excels in covering blockchain technology and cryptocurrencies, offering insightful analysis and a strong grasp of market trends. With a focus on reporting the latest news, she delivers a nuanced perspective, exploring the intersection of finance, technology, and emerging crypto trends. Her ability to break down complex topics makes her work accessible to both seasoned investors and newcomers. ionate about the transformative power of blockchain, she continually researches industry developments to provide readers with accurate, engaging, and well-researched content. She also closely monitors regulatory changes, helping readers understand their impact on the crypto market.