The most common hypothesis is the sandwich attack, where MEV bots manipulate prices to profit, causing the trader to lose $714,000.
Laughable: Swapped $733,000 but only received $19,000
Sandwich Attack
An unusual transaction is causing the crypto community to raise questions. This trader lost almost all of their assets in a stablecoin swap transaction.
According to on-chain data, the trader swapped 732,583 USDC but only received 18,636 USDT, raising suspicions of a targeted attack or even a sophisticated money laundering scheme.
Unknown entity got sandwiched for 714k today on six separate USDC -> USDT swaps. (Traded with 100% slippage allowed.)
— DeFiac (@TheDEFIac) March 12, 2025
They swapped 732583.429405 USDC for 18636.232611 USDT.
A promised 🧵: pic.twitter.com/0rFNE4DfoP
The transaction used the USDC-USDT liquidity pool on Uniswap V3, one of the most liquid stablecoin pools currently. DeFi researcher Michael Nadeau believes this could be the result of a sandwich attack, a front-running tactic executed by MEV bots to profit from user transactions.
Is anyone safe using DeFi?
— Michael Nadeau | The DeFi Report (@JustDeauIt) March 12, 2025
A user on @Uniswap v3 was just sandwiched attacked out of $216k while simply trying to swap $221k USDC to USDT.
Mind you, this was a pool that had over $35m of USDC and USDT it.
This is insane.
How did it happen?
An MEV bot front-ran the tx by… pic.twitter.com/cyzu4M6qfz
MEV (Maximal Extractable Value) bots are high-speed trading algorithms that exploit the transaction processing mechanism on the Bit chain to profit from price differences (arbitrage). The sandwich attack works as follows:
Front-run: The MEV bot detects a large swap order and quickly buys the asset to drive up the price.
Victim's transaction: The trader is forced to buy at a higher price.
Back-run: The MEV bot immediately sells the asset it just bought at the higher price, profiting from the price difference.
The result is that the trader has to pay the manipulated price and loses a large portion of their assets without being able to defend against it. According to TheDEFIac, this trader was sandwich attacked on six different USDC-USDT swap transactions, resulting in a total loss of $714,000.
The Perpetrator Disguises Money Laundering Behavior
In addition to the hypothesis about MEV bots, an even more serious hypothesis is raised: Could this be a sophisticated money laundering scheme?
0xngmi, co-founder of defillama, argues that if someone owns illicit funds, such as from North Korea, they could intentionally create an exploitable transaction for MEV bots, then privately send it to an MEV bot to perform the arbitrage. In this way, they can launder the money with almost no losses.
i think some of these really bad swaps could be money laundering
— 0xngmi (@0xngmi) March 12, 2025
if you have NK illicit funds you could construct a very mev-able tx, then privately send it to a mev bot and have them arb it in a bundle
that way you wash all the money with close to 0 losses
On-chain data also "accuses" the wallets involved of conducting many complex transactions with unnecessary intermediate chains, a common sign of money laundering activity. The funds were deposited from exchanges like Binance and Bybit, then swapped through the USDC-USDT pool on Uniswap before being attacked.
Analyst TheDEFIac also discovered another suspicious transaction: swapping 220,806 USDC but only receiving 5,000 USDT - a loss too large to be a normal transaction error.
Regardless of the actual cause, this incident has sounded the alarm about the latent risks in the DeFi space. It shows that not only hackers, but the decentralized financial system itself can be manipulated, and the user protection mechanisms on DEXes need to be improved to prevent similar incidents.
Compiled by Coin68
