After orchestrating a sequence of hacks on two decentralized cryptocurrency exchanges (DEXs) that stole greater than $12 million value of crypto, former safety engineer Shakeeb Ahmed was sentenced as we speak to 3 years in jail, that is the first-ever sensible contract hacking conviction within the US.
Ahmed was additionally ordered to forfeit the stolen crypto and pay restitution to the affected exchanges.
Engineer Exploits Crypto Vulnerabilities In $12 Million Hacks
Based on charging paperwork and court docket filings, Ahmed carried out two separate assaults on decentralized exchanges. Within the first incident, which came about on July 2 and three, 2022, he manipulated pretend pricing knowledge to generate roughly $9 million in inflated charges. Subsequently, Ahmed withdrew these charges within the type of cryptocurrency.
Following the theft, Ahmed communicated with the trade, providing to return the stolen funds, besides $1.5 million, if the trade didn’t contain legislation enforcement.
Shortly after, on July 28, 2022, Ahmed focused one other decentralized trade referred to as Nirvana Finance. Exploiting a vulnerability in Nirvana’s sensible contracts, he bought crypto property at a lower cost than supposed and promptly resold them again to Nirvana at a better worth.
Regardless of Nirvana providing a considerable “bug bounty” of as much as $600,000 for the return of the stolen funds, Ahmed demanded $1.4 million. This led to the collapse of the trade, which had misplaced all its possessed funds, roughly $3.6 million, as a consequence of Ahmed’s assault.
From Safety Professional To Cybercriminal
The investigation revealed that Ahmed used “superior cash laundering methods” to hide the supply and possession of the stolen funds.
These included token swap transactions, transferring fraud proceeds from the Solana (SOL) blockchain to the Ethereum (ETH) blockchain via “bridging,” changing the funds to Monero, after which utilizing abroad exchanges and cryptocurrency mixers comparable to Samourai Whirlpool.
Ahmed, a US citizen, held a senior safety engineer place at a world expertise firm on the time of the assaults. His resume showcased experience in reverse engineering sensible contracts and conducting blockchain audits, expertise that he utilized to execute the hacks.
Along with the three-year jail time period, Ahmed was sentenced to 3 years of supervised launch. He should forfeit roughly $12.3 million, together with a major quantity of cryptocurrency, and pay the affected exchanges over $5 million in restitution. Commenting on Shakeeb Ahmed’s sentencing, US Lawyer Damian Williams mentioned
Right this moment, Shakeeb Ahmed was sentenced to jail within the first-ever conviction for the hack of a wise contract and ordered to forfeit all the stolen crypto. Regardless of how novel or refined the hack, this Workplace and our legislation enforcement companions are dedicated to following the cash and bringing hackers to justice. And as as we speak’s sentence reveals, time in jail — and forfeiture of all of the stolen crypto — is the inevitable consequence of such damaging hacks.
Featured picture from Shutterstock, chart from TradingView.com
