A crypto trader suffered a significant loss of over $215,000 on March 12 after falling victim to a sandwich attack while swapping stablecoins. This incident, facilitated by a Maximum Extractable Value (MEV) bot, has raised concerns about potential repeated attacks on the same trader.
How the Sandwich Attack Happened
The trader attempted to swap $220,764 worth of USD Coin (USDC) for Tether (USDT) on Uniswap v3 but ended up with just $5,271 in USDT—a devastating loss of nearly 98%.
According to Michael Nadeau, founder of The DeFi Report, the attack was executed through Uniswap v3’s USDC-USDT liquidity pool, which currently holds approximately $19.8 million in locked value. The MEV bot exploited the transaction by:
- Front-running the swap: The bot removed all USDC liquidity from the pool before the trade was executed.
- Re-inserting liquidity: After the transaction, the bot placed the liquidity back, ensuring it profited from the price difference.
The attacker also tipped Ethereum block builder “bob-the-builder.eth” $200,000, keeping $8,000 as profit from the exploit.
Possible Repeated Attacks on the Same Trader
DeFi researcher “DeFiac” suggests that the same trader, using different wallets, may have fallen victim to six sandwich attacks in total on March 12. Internal data suggests that:
- The funds involved in these transactions originated from Aave, a borrowing and lending protocol.
- Two wallets—0xDDe…42a6D and 0x999…1D215—were attacked around 9:00 AM UTC, losing $138,838 and $128,003, respectively.
Given that these transactions followed the same pattern as the initial attack, experts speculate that either the trader was repeatedly targeted or that these trades were part of a larger scheme.
Money Laundering Concerns
Some industry analysts believe these transactions could be a deliberate attempt at money laundering. DefiLlama founder “0xngmi” suggested that an entity with illicit funds could:
- Create a highly MEV-profitable transaction.
- Privately send it to an MEV bot to execute in a controlled way.
- Use the bot to wash the funds with minimal losses.
Uniswap’s Role and Clarifications
Initially, Nadeau criticized Uniswap, assuming its lack of protection allowed the attack. However, Uniswap CEO Hayden Adams clarified that the transactions did not come from Uniswap’s front end, which has MEV protection and default slippage settings to mitigate such risks.
After these clarifications, Nadeau retracted his criticism, acknowledging that the trader’s losses were likely due to external factors rather than Uniswap’s platform.
