Ross Ulbricht Loses $12M in Solana Token Mishap on Raydium

Ross Ulbricht, or someone managing his Solana donation wallet, has accidentally lost $12 million while attempting to provide liquidity for ROSS, a meme token sent to him by developers. The error resulted in a massive price collapse, with a bot instantly draining millions from the pool.

ROSS ULBRICHT LOST $12M ON PUMPFUN…

Ross Ulbricht, or someone with access to his wallets, just accidentally nuked the price of a pumpfun coin sent to him while trying to provide liquidity on Raydium.

Because he initialized the liquidity pool at the wrong price, $1.5M of the… pic.twitter.com/kN5BN2mN49

— Arkham (@arkham) January 30, 2025

How It Happened: A Costly Liquidity Mistake

Ulbricht’s donation address recently received 50% of the total supply of ROSS, a token named after him. Instead of selling off the tokens manually, he attempted to add liquidity on Raydium to facilitate passive sales.

However, he set up the pool incorrectly, using a Constant-Product Market Maker (CPMM) instead of a Concentrated Liquidity Market Maker (CLMM). This mistake allowed a Maximal Extractable Value (MEV) bot to immediately drain $1.5 million worth of tokens from the liquidity pool.

After the first incident, he repeated the mistake, resulting in an additional $10.5 million loss, a combined total of 40% of the token supply.

Price Crash and Aftermath

• The MEV bot sold the tokens for over $600K, causing the ROSS token price to crash by 90%.
• Despite the losses, Ulbricht’s address still holds 10% of the total supply, now valued at around $200K.
• The remaining liquidity is now correctly placed in a Raydium CLMM pool.

This event highlights the risks of handling large crypto allocations without precise liquidity management, especially in an environment where automated trading bots quickly exploit mistakes.