Source: Cointelegraph Original: "{title}"

A cryptocurrency trader suffered a loss of nearly 98% of their funds, amounting to $220,764, due to a sandwich attack while executing a stablecoin transfer, falling victim to a maximum extractable value (MEV) bot attack.

In just 8 seconds, $220,764 worth of USDC stablecoin was exchanged for only $5,271 worth of Tether (USDT), as the MEV bot successfully front-ran the transaction, profiting over $215,500.

Data from the Ethereum block explorer indicates that this MEV attack occurred in the USDC-USDT liquidity pool on the decentralized exchange Uniswap v3, which currently has $19.8 million worth of assets locked.

         Sandwich attack transaction details. Source: Etherscan

According to Michael Nadeau, founder of The DeFi Report, the MEV bot front-ran the transaction by withdrawing all USDC liquidity from the Uniswap v3 USDC-USDT liquidity pool and then putting it back after the transaction was executed.

Nadeau stated that the attacker paid a $200,000 tip to Ethereum block builder "bob-the-builder.eth" from the $220,764 transaction, while pocketing $8,000 for themselves.

DeFi researcher "DeFiac" speculated that the same trader experienced a total of six "sandwich attacks" using different wallets, citing "internal tools." They noted that all funds first circulated through the lending protocol Aave before being deposited into Uniswap.

Two of the wallets encountered MEV bot "sandwich attacks" around 9 AM UTC on March 12. The Ethereum wallet addresses "0xDDe…42a6D" and "0x999…1D215" suffered losses of $138,838 and $128,003, respectively, in transactions that occurred three to four minutes prior.

The traders of these two transactions performed the same exchange operation in the Uniswap v3 liquidity pool as the trader who executed the $220,762 transfer.

Others speculated that these transactions could be attempts at money laundering.

0xngmi, founder of the cryptocurrency data dashboard DefiLlama, stated, "If you have illegal funds from North Korea, you can construct a transaction that is very easily exploited by MEV, then privately send it to the MEV bot and let them arbitrage it in a bundle. This way, you can wash all the money with almost zero loss."

Although Nadeau initially criticized Uniswap, he later acknowledged that these transactions did not originate from Uniswap's front end, as Uniswap's front end has MEV protection and default slippage settings.

After Uniswap CEO Hayden Adams and others clarified the protective measures Uniswap has taken to prevent "sandwich attacks," Nadeau retracted his criticisms.

Source: Hayden Adams

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