Ross Ulbricht Took on DeFi — And Lost $12 Million

Ross Ulbricht outsmarted law enforcement, survived a life sentence, and walked free thanks to Trump. But his first move in the real world? Losing $12 million trading meme coins.

The Silk Road mastermind may have thrived in the shadows, but DeFi didn’t play fair. According to blockchain research firm Arkham Intelligence, Ulbricht’s first crypto comeback turned into a spectacular wipeout—and the decentralized exchange won.

Freshly freed, Ulbricht—or someone in his orbit—thought it was a good idea to provide liquidity for the ROSS meme coin on Raydium DEX.

A noble effort—until a tiny mistake vaporized the price instantly. Before anyone could react, an MEV bot sniffed out the opportunity, snapped up $1.5 million in tokens, and resold them in an active pool.

The losses? A mere 5% of the supply—but a brutal lesson in DeFi mechanics.

Why learn from one multimillion-dollar disaster when you can double down on another?

After the first $1.5 million mishap, Ulbricht (or his financial wizards) decided to give it another shot, only to flush $10.5 million down the DeFi drain—taking 35% of ROSS’s supply with it.

Turns out, prison preps you for a lot of things—but not blockchain trading.

According to Arkham, Ulbricht’s grand strategy was to quietly cash out his holdings by adding one-sided liquidity.

The problem? He used the wrong tool for the job. Instead of deploying CLMM (Concentrated Liquidity Market Maker)—which allows targeted liquidity distribution—he accidentally triggered a Raydium CPMM (Constant-Product Market Maker) pool, leading to instant chaos.

Like sharks in bloody water, the bots pounced—buying up the cheap tokens, flipping them instantly, and crashing ROSS by 90%.

As a result, the donations meant for FreeRoss.org are now about as useful as Monopoly money.

Genius-level strategy! Still convinced Silk Road’s infamous founder was some crypto-laundering mastermind? Doesn’t look like it—because he just got outplayed by bots.

But if there’s one thing we know about crypto, it’s that short-term memory loss is practically a feature. While the world laughs at the disaster, ROSS has surged 700% in a single day.

Perhaps investors believe that after back-to-back liquidity blunders, the worst is already behind them?

Addresses tied to Ross Ulbricht were flagged as donation wallets for FreeRoss.org, the initiative led by his family to fight for his release. One of these wallets received a staggering 50% of the total ROSS token supply.

Even after 40% of the supply was wiped out, about 10% remains untouched, still valued at $200,000—a significant chunk despite the chaos.

A quick reminder: Ross Ulbricht, the creator of Silk Road, the first major Bitcoin-powered darknet marketplace, was arrested in 2013 and sentenced in 2015 to two life terms plus 40 years.

But on January 22, 2025, Donald Trump, having secured a second term, granted Ulbricht a full pardon, fulfilling a key campaign promise.

Ulbricht might have escaped a life sentence, but he clearly wasn’t ready to navigate DeFi. Maybe a quick read-through of a decentralized exchange guide would’ve saved him a few million.

Meanwhile, we might need to start prepping for Sam Bankman-Fried’s comeback—he’s already sent a pardon request to Trump. If he gets back into the game, expect the crypto market to shake like never before.