Computer security engineer Shakeeb Ahmed was sentenced to three years in prison followed by three years of supervised release in Southern New York District (SDNY) Court. Ahmed was found guilty of flash loan attacks on the decentralized Crypto Exchange and Nirvana exchanges in 2022.
U.S. Attorney Damian Williams said in a statement that Ahmed’s conviction was the first for hacking a smart contract. Ahmed was also ordered to forfeit $12.3 million as well as “a significant quantity of cryptocurrency” and to pay the exchanges $5 million in restitution.
Ahmed had offered to return all the funds stolen from Crypto Exchange except for $1.5 million if the exchange did not contact law enforcement. Nirvana offered him $600,000 for the return of funds, but Ahmed demanded $1.4 million, out of the $3.6 million he hacked, and no agreement was reached.
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Nirvana’s NIRV stablecoin depegged from the U.S. dollar, and its native ANA coin fell by 85% on the news of the hack and closed shortly afterward. According to the SDNY statement, Ahmed laundered the hacked funds:
“Using token-swap transactions; ‘bridging’ fraud proceeds from the Solana blockchain over to the Ethereum blockchain; exchanging fraud proceeds into Monero […]; using overseas cryptocurrency exchanges; and using cryptocurrency mixers, such as Samourai Whirlpool.”
It has also been observed that a third exchange, Crema, was subject to an attack in July 2022 using the same methods, but the federal charges did not link him to that hack.
Ahmed was employed as “a senior security engineer for an international technology company” at the time he carried out the attacks, according to the statement. According to Bloomberg, Ahmed was the technical lead of Amazon’s bug bounty program.
According to Inner City Press, Ahmed, who was released on bail, now works for a mental health care startup. That publication quoted him as saying, “I witnessed hacks, I found a way to exploit an exchange's smart contracts. I went into therapy” at his trial.
Ahmed was arrested in New York and charged in July with wire fraud and money laundering in connection with the hacks. He went on to plead guilty to a single charge of computer fraud in December.
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