Crypto trader loses $215K in sandwich attack during stablecoin swap

A crypto trader suffered a significant loss of over $215,000 on March 12 due to a sandwich attack during a stablecoin swap on Uniswap v3.

The attack, executed by a Maximum Extractable Value (MEV) bot, reduced the trader's $220,764 worth of USD Coin to just $5,271 in Tether (CRYPTO:USDT) within seconds.

According to blockchain data, the MEV bot manipulated the transaction by draining the USDC liquidity from the Uniswap (CRYPTO:UNI) v3 USDC-USDT pool before the swap and restoring it immediately after.

This tactic allowed the attacker to profit from the price slippage caused by their actions.

Michael Nadeau, founder of The DeFi Report, explained that the attacker tipped $200,000 to Ethereum (CRYPTO:ETH) block builder “bob-the-builder.eth” and kept an $8,000 profit for themselves.

Further analysis revealed that this was not an isolated incident.

DeFi researcher “DeFiac” speculated that the same trader may have been targeted in five additional sandwich attacks on March 12 using different wallets.

Two transactions at around 9:00 AM UTC alone resulted in losses of $138,838 and $128,003, respectively.

All trades involved swaps within the same Uniswap v3 liquidity pool and were linked to funds originating from Aave (CRYPTO:AAVE).

While some speculate these transactions could be attempts at money laundering, others point to insufficient safeguards in decentralised exchanges.

Sandwich attacks exploit vulnerabilities in decentralised finance (DeFi) protocols by front-running and back-running trades to manipulate prices.

Attackers monitor public mempools for large or high-slippage transactions and strategically place their own trades to profit from price changes.

Uniswap CEO Hayden Adams clarified that these transactions did not originate from Uniswap’s front-end interface, which includes MEV protection and default slippage settings.

This highlights how users relying on custom or third-party interfaces without such safeguards remain vulnerable.