U.S. Attorney Damian Williams announces the first-ever criminal case involving an attack on a smart contract operated by a decentralized cryptocurrency exchange

Earlier today Damian Williams, the United States Attorney for the Southern District of New York announced the unsealing of an Indictment charging SHAKEEB AHMED with wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange. Ahmed was arrested this morning.

you can view the announcement here: https://twitter.com/sdnynews/status/1678780204062490626

you can read the official press release here: https://www.justice.gov/usao-sdny/pr/former-security-engineer-international-technology-company-arrested-defrauding

U.S. Attorney Damian Williams said:

“This is the second case we are announcing this week to shed light on fraud in the cryptocurrency and digital asset ecosystem. As alleged in the indictment, Shakeeb Ahmed, who was a senior security engineer at an international technology company, used his expertise to defraud the exchange and its users and steal approximately $9 million in cryptocurrency. We also allege that he then laundered the stolen funds through a series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges. But none of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my Office or our law enforcement partners from following the money.”

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This was the hacker who exploited Crema Finance last year for 10 million and returned 8 million (turns out cutting these deals does not make you immune from criminal charges)

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you can read more about that hack here: https://cointelegraph.com/news/crema-hacker-returns-8m-keeps-1-6m-in-deal-with-protocol

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he also attempted to cover his tracks but apparently was unsuccessful

AHMED laundered the millions in fees that he stole from the Crypto Exchange to conceal their source and ownership, including through (i) conducting token-swap transactions, (ii) “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain, (iii) exchanging fraud proceeds into Monero, an anonymized and particularly difficult cryptocurrency to trace, and (iv) using overseas cryptocurrency exchanges.

This entire thing is kind of crazy and them being able to track him down in a year after it seems he used all the tools available to him in crypto to remain anonymous.