In 2011, darknet entrepreneur Ross Ulbricht founded Silk Road — an online marketplace. The website quickly became a hub for illicit and illegal transactions.
Ulbricht, also known under the pseudonym ‘Dread Pirate Roberts’, who envisioned Silk Road as a libertarian marketplace that supported buying and selling without government interference, was arrested on October 1, 2023.
Subsequently charged and found guilty of money laundering, computer hacking, and conspiracy to traffic narcotics, he was controversially sentenced to double life imprisonment plus forty years, without the possibility of parole.
Ultimately, the Silk Road founder would spend 11 years in prison — as he was granted a full and unconditional pardon by President Donald Trump on January 21, 2025.
While serving his sentence, which included stints in correctional facilities in New York, Colorado, and Arizona, Ulbricht received donations from supporters, often in the form of various cryptocurrencies — and he might have sold up to 40% of the total supply of one of those assets on accident.
Ross Ulbricht makes a costly gaffe in an attempt to provide liquidity
Ross Ulbricht (or another person with access to his wallets), accidentally sent the price of Solana (SOL) based ROSS (Ross Ulbricht Fund) crashing downward — however, this was not the result of a sudden sale but appears to have been a mistake, according to intelligence company Arkham Intelligence, which shared its findings in an X post on January 30.
First, let’s backtrack. Last week, Ulbricht received 50% of the total supply of ROSS. The Silk Road founder then attempted to add single-sided liquidity, in order to sell the coins passively.
However, he initialized the liquidity pool at the wrong price — instead of creating the pool with Raydium CLMM (concentrated liquidity market maker), he did so with CPMM (constant-product market maker). Using a CLMM would have allowed Ulbricht to set a specific price range for providing liquidity, whereas using a CPMM did not allow him to do so.
As a result, a maximal extractable value (MEV) bot designed to spot arbitrage opportunities took 5% of the token’s total supply — worth roughly $1.5 million. Ulbricht would go on to repeat his mistake, at which point the MEV made an even more significant purchase, amounting to 35% of the total supply of ROSS, worth approximately $10.5 million at the time.
Following this, the bot sold the coins off, netting roughly $600,000, and lowering the price of ROSS by approximately 90%.
ROSS price chart with Ulbricht’s sale highlighted. Source: Arkham Intelligence on X
Ulbricht still holds 10% of the token’s supply in a separate address, with a properly configured liquidity pool in place — the stake was worth approximately $200,000 as of press time.
Featured image via Shutterstock
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