May 18, 2024

Apr 13, 2024NewsroomCryptocurrency / Regulatory Compliance

Crypto Exchange Thefts

A former safety engineer has been sentenced to a few years in jail within the U.S. for costs regarding hacking two decentralized cryptocurrency exchanges in July 2022 and stealing over $12.3 million.

Shakeeb Ahmed, the defendant in query, pled guilty to 1 rely of pc fraud in December 2023 following his arrest in July.

“On the time of each assaults, Ahmed, a U.S. citizen, was a senior safety engineer for a world expertise firm whose resume mirrored expertise in, amongst different issues, reverse engineering good contracts and blockchain audits, that are a number of the specialised expertise Ahmed used to execute the hacks,” the U.S. Division of Justice (DoJ) famous on the time.

Cybersecurity

Whereas the identify of the corporate was not disclosed, he was residing in Manhattan, New York, and working for Amazon earlier than he was apprehended.

Courtroom paperwork present that Ahmed exploited a safety flaw in an unnamed cryptocurrency trade’s good contracts to insert “faux pricing information to fraudulently generate tens of millions of {dollars}’ value of inflated charges,” which he was in a position to withdraw.

Subsequently, he initiated contact with the corporate and agreed to return many of the funds aside from $1.5 million if the trade agreed to not alert regulation enforcement in regards to the flash loan attack.

It is value noting that CoinDesk reported in early July 2022 that an unknown attacker returned greater than $8 million value of cryptocurrency to a Solana-based crypto trade known as Crema Finance, whereas conserving $1.68 million as a “white hat” bounty.

Ahmed has additionally been accused of finishing up an assault on a second decentralized cryptocurrency trade known as Nirvana Finance, siphoning $3.6 million within the course of, in the end resulting in its shutdown.

“Ahmed used an exploit he found in Nirvana’s good contracts to permit him to buy cryptocurrency from Nirvana at a lower cost than the contract was designed to permit,” the DoJ mentioned.

Cybersecurity

“He then instantly resold that cryptocurrency to Nirvana at a better worth. Nirvana provided Ahmed a ‘bug bounty’ of as a lot as $600,000 to return the stolen funds, however Ahmed as an alternative demanded $1.4 million, didn’t attain settlement with Nirvana, and stored all of the stolen funds.”

The defendant then laundered the stolen funds to cowl up the path utilizing cross-chain bridges to maneuver the illicit digital belongings from Solana to Ethereum and exchanging the proceeds into Monero utilizing mixers like Samourai Whirlpool.

Apart from the three-year jail time period, Ahmed has been sentenced to a few years of supervised launch and ordered to forfeit roughly $12.3 million and pay restitution amounting greater than $5 million to each the impacted crypto exchanges.

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