A crypto trader recently suffered a significant financial loss due to a sandwich attack on March 12, resulting in a loss exceeding $215,000. This occurred during a stablecoin transfer of $220,764 from USD Coin (USDC) to Tether (USDT), with the transaction being executed within eight seconds. The attack employed a Maximum Extractable Value (MEV) bot that managed to front-run the transaction on the Uniswap v3 liquidity pool, effectively reducing the value to just $5,271.
Ethereum block explorer data revealed that the MEV attack transpired on the decentralized exchange Uniswap v3’s USDC-USDT liquidity pool, holding $19.8 million. The MEV bot exploited the transaction by withdrawing all USDC liquidity from the pool and then returning it once the transaction completed, reportedly leaving a $200,000 tip for the Ethereum block builder “bob-the-builder.eth” and securing an $8,000 profit for the attacker.
Further speculation suggests the same trader may have been targeted in five additional sandwich attacks the same day, as indicated by “DeFiac,” a DeFi researcher. They proposed that these instances involved the usage of different wallets, each routed from borrowing and lending protocol Aave before being placed on Uniswap. Among these, two wallet addresses were also victimized for $138,838 and $128,003 respectively, during transactions that occurred minutes before.
Speculation has arisen that such activity could be linked to money laundering, whereby malicious actors construct MEV-targeted transactions to obscure illicit funds. Despite initial criticism aimed at Uniswap for these occurrences, company figures later clarified existing protections against sandwich attacks, which do not originate from Uniswap’s front-end application, where specific safeguards like MEV protection and default slippage settings are in place.
