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Over $700K USDC Lost in DeFi Sandwich Attack—Experts Suspect Money Laundering

A recent incident has caused a stir in the decentralized finance (DeFi) community. It has been reported that a user lost over $700,000 in a sophisticated sandwich attack. Experts are now saying that this event may have been a premeditated attempt at money laundering rather than a simple exploit.

Understanding Sandwich Attacks in DeFi

Sandwich attacks are a type of front-running attack in which an attacker manipulates the price of a token by placing transactions before and after a victim’s trade.

By taking advantage of the fact that blockchain transactions are completely transparent, this strategy enables malicious actors to make a profit at the expense of traders who are unaware of the situation. 

In the most recent instance, a trader attempted to convert about $732,000 USDC to Tether (USDT) on Uniswap V3, a well-known decentralized exchange.  The trader suffered a significant loss as a consequence of the sandwich attack, which resulted in the trader receiving just approximately $19,000 USDT

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