The U.S. Attorney for the Southern District of New York has sued Shakeeb Ahmed, a computer security engineer based in New York, for defrauding a $9 million decentralized cryptocurrency exchange. The DEX, which operates on the Solana blockchain, remains unnamed in the indictment, but details reflect the July 2022 Krema Finance hack.
Steal (and launder) millions.
Ahmed allegedly exploited a vulnerability in one of the DEX’s smart contracts, inserting fraudulent pricing data that resulted in large fees being generated, amounting to approximately $9 million. He was also accused of using “flash loans” to further defraud the exchange, allegedly borrowing millions of dollars, then depositing them into the DEX’s liquidity pool and then withdrawing the money, paying a hefty percentage as fees. claimed.
The indictment also alleges that Ahmed attempted to launder the stolen money through complicated transfers through blockchains and international exchanges. He attempted to bridge funds from Solana to Ethereum and even traded the illicit proceeds into Monero, a cryptocurrency known for its high level of anonymity and difficulty in tracking.
“Can I cross the border with crypto?”
Intriguingly, two days after the attack, Ahmed searched the internet for “DeFi hack” and read news articles about his own hack. His search history also included “wire fraud” and “evidence laundering” investigations. In addition, Ahmed seemingly explored escape routes, researching his ability to flee the US, avoid extradition and protect his stolen assets. His searches include phrases like “can I cross the border with crypto”, “how can I avoid the federal government seizing assets”, and “buy citizenship”.
After the hack, Ahmed reportedly proposed a deal to return most of the stolen money to the exchange, keeping $1.5 million for himself in exchange for the DEX not reporting the incident to the police. would report. His offer also included informing the DEX of their technical vulnerabilities.
This case follows another DOJ indictment of blockchain fraud in the same week regarding NFTs. Ahmed is now charged with bank fraud and money laundering, with a possible maximum sentence of 20 years in prison.
Editor’s Note: This article was written by an nft now contributor in collaboration with OpenAI’s GPT-4.