{"id":19907,"date":"2023-07-11T21:25:43","date_gmt":"2023-07-11T21:25:43","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/nft\/new-york-computer-security-engineer-indicted-in-9-million-defi-fraud\/"},"modified":"2023-07-11T21:25:48","modified_gmt":"2023-07-11T21:25:48","slug":"new-york-computer-security-engineer-indicted-in-9-million-defi-fraud","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/nft\/new-york-computer-security-engineer-indicted-in-9-million-defi-fraud\/","title":{"rendered":"New York Computer Security Engineer Indicted in $9 Million DeFi Fraud"},"content":{"rendered":"
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The U.S. Attorney\u2019s Office for the Southern District of New York has indicted Shakeeb Ahmed, a computer security engineer based in New York, for defrauding a decentralized cryptocurrency exchange of $9 million. The DEX, operating on the Solana blockchain, remains unnamed in the indictment, but the details mirror the July 2022 Crema Finance<\/a> hack.<\/p>\n

Stealing (and laundering) millions<\/h2>\n

Ahmed allegedly exploited a vulnerability in one of the DEX\u2019s smart contracts, inserting fraudulent pricing data that resulted in the generation of inflated fees, amounting to approximately $9 million. He was also accused of utilizing \u201cflash loans\u201d to further defraud the exchange, reportedly borrowing millions of dollars, then depositing them in the DEX\u2019s liquidity pool, and subsequently withdrawing the funds, claiming a hefty percentage as fees.<\/p>\n

The indictment also alleges that Ahmed attempted to launder the stolen funds through intricate transfers across blockchains and international exchanges. He tried bridging funds from Solana to Ethereum and even exchanged the illicit proceeds into Monero, a cryptocurrency well-known for its high level of anonymity and difficulty to trace.<\/p>\n

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Crema Finance Exploiter’s Search History Post-Attack<\/p>\n

defi hacks fbi
defi hacks proecution
wirefraud
how to prove malicious intent
evidence laundering
can I cross border with crypto
how to stop federal government from seizing assets
how to stop fed govt from seizing assets pic.twitter.com\/RkETG5EWJz<\/a><\/p>\n

\u2014 db (@tier10k) July 11, 2023<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

\u201cCan I cross the border with crypto?\u201d<\/h2>\n

Intriguingly, two days following the attack, Ahmed conducted internet searches for \u201cDeFi hack\u201d and read news articles on his own hack. His search history also included inquiries for \u201cwire fraud\u201d and \u201cevidence laundering.\u201d Moreover, Ahmed seemingly explored escape routes, conducting searches regarding his ability to flee the U.S., avoid extradition, and protect his stolen assets. His searches included phrases like \u201ccan I cross border with crypto,\u201d \u201chow to stop federal government from seizing assets,\u201d and \u201cbuying citizenship.\u201d<\/p>\n

Following the hack, Ahmed reportedly proposed a deal to return the majority of the stolen funds to the exchange, holding back $1.5 million for himself, in exchange for the DEX not reporting the incident to law enforcement. His offer also included enlightening the DEX on their technical vulnerabilities.<\/p>\n

This case follows another DOJ indictment of blockchain fraud in the same week related to NFTs. Ahmed now faces charges of wire fraud and money laundering, with a potential maximum sentence of 20 years in prison.<\/p>\n

Editor\u2019s note: This article was written by an nft now staff member in collaboration with OpenAI\u2019s GPT-4.<\/em><\/p>\n<\/p><\/div>\n