US citizen arrested for $9 million crypto exchange hack


US authorities have detained former security engineer Shakib Ahmed on suspicion of hacking an unnamed decentralized exchange worth $9 million.

He was charged with wire fraud and money laundering. Law enforcement officers called this case “the first criminal case” related to smart contracts.

U.S. Attorney Damian Williams for the Southern District of New York said the suspect laundered the stolen funds through a “series of complex transfers, hops across different blockchains and overseas cryptocurrency exchanges.”

According to the investigation, in July 2022, Ahmed exploited a vulnerability in one of the exchange’s smart contracts and entered false price data. This resulted in the protocol “generating approximately $9 million in inflated fees that the defendant illegally obtained.”

Subsequently, the detainee offered the platform to return the stolen funds, leaving himself $ 1.5 million as a reward if the exchange team did not contact the police.

Ahmed allegedly searched the web for news articles about hacking, information about hacking and criminal liability for these actions. Several of his requests included “escape from the country with cryptocurrency” and “purchase citizenship”.

“None of these actions covered the defendant’s tracks, deceived law enforcement agencies and, of course, did not prevent the department or our partners from following the money,” the prosecutor said.

Ahmed faces up to 20 years in prison on the charges.

Recall that in November 2022, 33-year-old Russian Mikhail Vasiliev was arrested on suspicion of large-scale hacker attacks using LockBit ransomware.

Later, the US Department of Justice announced the capture of 20-year-old Russian citizen Ruslan Astamirov for distributing the same ransomware.

In July 2023, two teenagers were arrested in Canada for stealing $4.2 million in cryptocurrencies from a US citizen.

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