Ex-Security Engineer Jailed 3 Years for $12.3 Million Crypto Exchange Thefts

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Ex-Security Engineer Jailed 3 Years for $12.3 Million Crypto Exchange Thefts

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 fees when it comes to hacking two decentralized cryptocurrency exchanges in July 2022 and stealing over $12.3 million.

Shakeeb Ahmed, the defendant in query, pled guilty to at least one rely of laptop fraud in December 2023 following his arrest in July.

“At the time of both attacks, Ahmed, a U.S. citizen, was a senior security engineer for an international technology company whose resume reflected skills in, among other things, reverse engineering smart contracts and blockchain audits, which are some of the specialized skills Ahmed used to execute the hacks,” the U.S. Branch of Justice (DoJ) famous on the past.

Past the identify of the corporate used to be no longer disclosed, he used to be dwelling in Long island, Brandnew York, and working for Amazon ahead of he used to be apprehended.

Courtroom paperwork display that Ahmed exploited a safety flaw in an unnamed cryptocurrency change’s roguish promises to insert “fake pricing data to fraudulently generate millions of dollars’ worth of inflated fees,” which he used to be ready to take out.

Therefore, he initiated touch with the corporate and affirmative to go back lots of the finances apart from for $1.5 million if the change affirmative to not alert regulation enforcement in regards to the flash loan attack.

It’s significance noting that CoinDesk reported in early July 2022 that an unknown attacker returned greater than $8 million significance of cryptocurrency to a Solana-based crypto change referred to as Crema Finance, year preserving $1.68 million as a “white hat” bounty.

Ahmed has additionally been accused of sporting out an assault on a 2nd decentralized cryptocurrency change referred to as Nirvana Finance, siphoning $3.6 million within the procedure, in the long run eminent to its shutdown.

“Ahmed used an exploit he discovered in Nirvana’s smart contracts to allow him to purchase cryptocurrency from Nirvana at a lower price than the contract was designed to allow,” the DoJ mentioned.

“He then immediately resold that cryptocurrency to Nirvana at a higher price. Nirvana offered Ahmed a ‘bug bounty’ of as much as $600,000 to return the stolen funds, but Ahmed instead demanded $1.4 million, did not reach agreement with Nirvana, and kept all the stolen funds.”

The defendant after laundered the stolen finances to defend up the path the usage of cross-chain bridges to advance the illicit virtual property from Solana to Ethereum and exchanging the proceeds into Monero the usage of mixers like Samourai Whirlpool.

But even so the three-year prison time period, Ahmed has been sentenced to a few years of supervised loose 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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