USDC investor shells out $2M to receive $0.05 USDT trying to evade crash

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Shortly after Circle revealed that Silicon Valley Bank did not transfer its $3.3 billion USD Coin (USDC) reserves, the market reacted with a massive sale, decoupling stablecoins from the U.S. dollar. But not all investors have had the good fortune to bring their money home in the midst of uncertainty.

To cut losses, investors began selling USDC tokens in exchange for other stablecoins such as Tether (USDT) to avoid temporary losses. Unfortunately, a member of Crypto Twitter named BowTiedPickle highlighted a deal showing that he paid over $2 million for a USDC investor to receive his USDT of $0.05.

An on-chain investigation revealed that users were storing assets in liquidity pools (LPs). This is a popular way to earn cryptocurrencies. A user could have sold his LP tokens in his USDT with his 6% slippage. However, they chose a “suspicious” method. Description by BowTiedPickle:

“An unfortunate soul dumped a large clip of 3CRV (DAI/USDC/USDT) LP tokens into USDT using a KyberSwap aggregation router.”

Given the race against time, USDC investors forgot to set their slippage. This allows investors to set an exact price for their tokens to go through the transaction. He further explained the various nuances that ultimately led to his MEV bot earning his $2.045 million profit after paying $45 for gas and his $39,000 MEV bribe. bottom.

Crypto Twitter member BowTiedPickle outlines how USDC investors lost over $2 million.Source: Twitter

The above episode highlights how human error can cause permanent loss of funds. When exchanging USDC for fiat currency or other cryptocurrencies, Cointelegraph advises investors to double-check the information and method of transfer.

Related: BREAKING: Circle reveals it has $3.3 billion tied up in Silicon Valley banks

Shortly after Circle confirmed $3.3 billion was stuck in Silicon Valley Banks, USDC was sold as a result and the value of the stablecoin fell below $1.

At the time of writing, USDC has lost more than 10% of its value as it is trading at $0.8774.