Crypto trader loses over $ 700,000 due to sandwich attack

A cryptocurrency trader fell victim to a sandwich attack, losing a significant amount of money during the exchange. He executed several swaps in the USDC-USDT liquidity pool on the Uniswap V3 platform and as a result received only $ 18,636 instead of $ 732,583. This happened due to the actions of a special MEV bot that took advantage of an unfinished transaction to manipulate prices.

The attacker used the classic sandwich attack scheme, in which two transactions are launched: one before the victim’s exchange and the other after it. This artificially increases the price of the asset that the victim buys, and then the bot sells it at an inflated rate. In this situation, the manipulation was so large-scale that it resulted in a loss of more than $ 700 thousand.

Experts advise traders to take certain security measures to avoid such attacks. In particular, it is worth reducing slippage (the permissible price deviation during a swap), choosing platforms that use mechanisms to protect against MEV bots, such as Cowswap, and using special RPC servers that do not disclose planned transactions.

Some analysts suggest that this transaction could have been not just a failed swap, but an attempt at money laundering. They drew attention to a complex scheme of asset movement before the attack, which included transfers through Binance and Bybit exchanges, as well as the use of Aave and Compound platforms. This could be a way to whitewash cryptocurrency funds through liquidity pools.

In recent years, sandwich attacks have become increasingly common in the cryptocurrency sector. In November 2024 alone, more than 35% of the blocks in the BNB Chain were subject to such attacks. This confirms the need to improve protection mechanisms for traders and decentralized finance platforms.