Chain trader suspected to have suffered a ‘sandwich attack’, losing over $700,000

A cryptocurrency trader lost more than $700,000 on Wednesday when a USDC-USDT liquidity pool on Uniswap V3 suffered a suspected ‘sandwich attack’ that resulted in $732,000 worth of USDC being exchanged for only $18,600 worth of USDT. According to on-chain data analysis, the incident may have been initiated by a MEV (Maximum Extractable Value) bot. The bot emptied the liquidity pool by preempting trades, causing a price imbalance and paying block builders to prioritise their trades.DeFi researcher Michael Nadeau noted that this attack uses the order of trades to manipulate prices for profit. In addition, some analysts have speculated that such unusual transactions could be part of a money laundering operation.DeFiLlama developer 0xngmi said that by constructing transactions that are easily arbitraged by MEV bots, money launderers can move funds with almost zero loss. The incident is still under further investigation.