In just two months, the infamous maximal extractible value (MEV) sandwich bot “arsc” accumulated roughly $30 million by exploiting Solana users via MEV attacks.
MEV sandwich attacks involve an attacker strategically placing their own transactions around a victim’s transaction, manipulating prices to take advantage of the situation. This strategy allows them to profit by purchasing the victim’s tokens at a discounted price below their market value and swiftly selling them in the same block.
On Jun. 15, Ben Coverston, the founder of cryptocurrency company MRGN Research, shed light on the activity of this particular sandwich bot, “arsc,” which has been secretly profiting from unaware Solana network users.
Coverston observed that the bot, primarily operating from a wallet address labeled “9973h…zyWp6,” appears to be using a cold storage strategy to protect its funds.
“It is quite inactive and, judging by its behavior, is almost certainly a locked-down, cold wallet.”
Ben Coverston
This wallet now houses more than $19 million in total funds, including roughly $17 million in Solana tokens and $1.1 million in Circle’s USD Coin (USDC) stablecoin. Furthermore, the wallet also contains minor amounts of Kabosu (KAB), Cringe Coin (CRINGE), and Wrapped Solana (wSOL).
Coverston noted that another significant wallet, identified as “Ai4zq…VXKKT,” is considerably more active in decentralized finance activities, adding that the wallet is steadily converting SOL to USDC via Jupiter’s dollar-cost averaging (DCA), a feature that allows users to place orders at specific price levels to minimize slippage.
The founder of MRGN Research pointed out that the wallet holds “significant” positions in Kamino and other liquidity-staking tokens, totaling over $9.9 million, primarily composed of non-SOL tokens.
Coverston also pointed out a third wallet address, identified as “BCbrp…vi58q,” which he alleges serves as arsc’s “main SOL bank.” These three wallets collectively hold tokens valued at $29.8 million at current market prices, indicating efforts by arsc’s operator to remain low-profile.
“It seems they don’t enjoy the attention, as they’ve recently gone to great lengths to hide their activities and profits.”
Ben Coverston
MEV sandwich bots use advanced algorithms to identify and take advantage of such profit possibilities. Similar activities have been noted among maximal extractable value bots on Ethereum as well. For example, earlier this year, an MEV arbitrage bot operator — known as 2Fast — made a profit of $1.8 million from a single transaction bundle.
Under 2Fast’s direction, the bot increased an initial investment of 703 SOL, valued at nearly $70,000, to a stunning 19,035 SOL, worth approximately $1.9 million. An additional 890 SOL was graciously awarded to Figment, a well-known network validator.
As the activities of MEV bots continue to draw attention, regulatory bodies are starting to take notice. The European Securities and Markets Authority (ESMA) is currently investigating MEV as a potential form of illegal market abuse in its proposed technical standards for the Markets in Crypto-Assets (MiCA) regulation.
