The Jared from Subway MEV bot lost $15 million over the weekend after an attacker baited it with fake tokens and liquidity pools in a counter-MEV honeypot. The bot's operator now faces a ticking clock: return 2150 ETH within 48 hours for a 50% white-hat bounty, or face legal action. The exploit comes as regulators on both sides of the Atlantic push forward with stablecoin rules and a new crypto bill.
How the attack worked
The attacker set up deceptive contracts and liquidity pools that tricked the bot into executing trades against fabricated pricing. Sandwich bots typically profit from front-running transactions, but this time the tables turned. The attacker used the bot's own automated logic against it, draining its ETH reserves in what might be the largest single MEV-related theft this year.
Bounty and legal threat
In an on-chain message, the bot operator offered the attacker a 50% cut — roughly 1075 ETH — if the funds are returned within two days. Otherwise, the operator said it would pursue legal remedies. Sandwich attacks operate in a gray zone under existing law, but the use of deceptive smart contracts to trick the bot could cross into fraud, legal experts note.
UK stablecoin rules finalized
On the regulatory front, the Bank of England published a policy statement and draft Code of Practice for systemic stablecoins. The rules remove previous holding caps of £20,000 for individuals and £10 million for businesses. Instead, they require issuers to keep at least 30% of reserves in deposits at the Bank of England, with the rest in high-quality UK assets. A temporary £40 billion issuance cap per stablecoin is also in place. Regulated stablecoin products could launch as early as 2027 under joint oversight. The move comes as 8% of UK adults — over 4.5 million people — now hold crypto assets, with awareness at 91%.
Polymarket's fake bet problem
A WSJ investigation found that Polymarket secretly paid creators through a firm called Virality to stage fake 'winning bet' videos using dummy sites, depicting approximately $1.9 million in fabricated wagers. Polymarket said it will audit its promotional content, but the revelation raises questions about the platform's marketing practices as it faces growing scrutiny.
Senate returns to crypto bill
The US Senate is resuming negotiations on the Bitcoin and Crypto Clarity Act, which has already cleared the Senate Banking Committee. The bill would provide a federal framework for digital asset classification and exchange regulation. No timeline for a floor vote has been set, but the resumption of talks signals momentum after months of stalled debate.
The 48-hour window for the MEV bot bounty closes June 23. Whether the attacker takes the deal or forces a court battle, the incident underscores the risks of automated trading strategies in a landscape where regulators are still catching up.
