Shakeeb Ahmed, a lead security engineer associated with a global technology firm, confessed on December 14th to committing computer fraud related to his attacks on two decentralized #cryptocurrency exchanges.
U.S. Prosecutor Announces Ahmed's Admission
Damian Williams, the U.S. Attorney for the Southern District of New York, announced on Thursday that Ahmed admitted his guilt. This admission is significant as it represents the first conviction for hacking smart contracts.
Details of the Hacks on Cryptocurrency Exchanges
Ahmed's actions involved incidents in July 2022 at two exchanges, one labeled as a "cryptocurrency exchange" and the other part of decentralized finance (DeFi), specifically the Nirvana Finance protocol.
Ahmed's Skills and Hacking Methods
At 34 years old, Ahmed served as a top security engineer with expertise in reverse engineering smart contracts and #blockchain audits. He exploited vulnerabilities in the smart contracts of the cryptocurrency exchange to illicitly generate approximately $9 million in trading fees. He then negotiated with the exchange, agreeing to return most of the stolen funds in exchange for not contacting the police.
Ahmed's Attack on Nirvana Finance
In another attack, Ahmed targeted Nirvana Finance in July 2022. Using a so-called flash loan, he secured about $10 million, manipulated Nirvana's smart contracts, and pocketed around $3.6 million. Despite Nirvana's offer of a bug bounty, Ahmed demanded $1.4 million, leading to Nirvana's downfall and retention of all stolen funds.
Complex Money Laundering Methods Post-Attacks
Ahmed employed sophisticated money laundering techniques, including token-swap transactions, transferring fraud proceeds between different blockchains, and converting financial assets to the privacy-focused cryptocurrency #Monero (XMR).
Ahmed Faces Up to Five Years in Prison
Ahmed pleaded guilty to one count of computer fraud, facing a sentence of up to five years in prison. As part of the plea agreement, he agreed to forfeit over $12.3 million, including about $5.6 million worth of stolen cryptocurrencies. His sentencing is scheduled for March 13, 2024, before U.S. District Judge Victor Marrero.
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