Man Swaps $2M for $0.05 USDT Due to USDC Panic

  1. One person made a transaction that caused him to lose almost $2 million.
  2. The trader used KyberSwap but did not set a slippage tolerance.
  3. KyberSwap is now working with various entities to help the person.

Amid the ongoing Circle USD (USDC) depeg due to Silicon Valley Bank’s recent collapse, one person mistakenly converted $2 million worth of crypto to $0.05.

According to the thread, the person, whose identity has not been revealed, failed to set a slippage tolerance when he initiated a trade on KyberSwap.

For those who are not familiar with decentralized finance (DeFi) exchanges, slippage tolerance refers to the number of tokens that a person is tolerating to accept in case the price changes drastically when the transaction is ready to do.

Unfortunately, the person may not have set the slippage tolerance due to panicking. Otherwise, he might not be comfortable using a DeFi protocol.

Due to this, the system selected a faulty or neglected pool that contained around $2 in liquidity.

KyberSwap caught wind of the situation and tried to perform a similar transaction. However, the issue was not replicated because the platform displayed a message that shows the sheer change in value.

At the moment, KyberSwap is working with the person who lost $2 million on how best he can be able to recover some of his money — if not all.

In addition, KyberSwap said that it has updated its user interface (UI) to provide clearer warnings to users who may otherwise do the same mistake.

To be clear, there was no hack or scam that occurred. This was an example of an honest mistake that an automated bot saw as an opportunity to make a profit — and a huge one at that.

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Jesus covers news related to the crypto space in Asia and in Australia, although he follows the latest events in the US and Europe as well. He is most interested in the blockchain gaming and regulation aspects of the industry.