A US District judge in a landmark ruling sentenced Shakeeb Ahmed to three years in prison for organising cyberattacks on two decentralized cryptocurrency exchanges. His actions resulted in the theft of over $12 million in crypto assets. Ahmed has now become the individual convicted for hacking a smart contract.
Crypto hackers get caught
As per the release, US Attorney Damian Williams highlighted the harshness of cybercrime. He stated, “No matter how novel or sophisticated the hack, this Office and our law enforcement partners are committed to following the money and bringing hackers to justice.”
Ahmed’s prison sentence shows the level of action taken by the courts to prevent such malicious acts. However, Ahmed had previously pleaded guilty to computer fraud in another case.
According to court documents, Ahmed executed the crypto theft attacks in July 2022. He did this by manipulating pricing data on a decentralized exchange. This was done to drain approx $9 million in inflated fees.
It mentioned that he later engaged in negotiations with the exchange. Ahmed did offer to return the stolen funds in exchange for non-reporting to authorities. This move shows his intent to evade accountability.
The court letter mentioned that shortly after the first attack, Ahmed targeted Nirvana Finance next. He exploited passivity in its smart contracts. This helped him to buy cryptos at discounted rates. This is important to note that despite Nirvana’s offer of a bug bounty, the culprit demanded a higher ransom. This action led to the complete depletion of Nirvana’s funds. It later resulted in a shutdown.
What happened?
In order to hide the ownership of the stolen cryptos, Ahmed used different laundering techniques. This includes token-swap transactions, bridging between blockchains, and converting proceeds into Monero.
The court agreed that his position as a senior security engineer helped him with specialized skills in blockchain audits and reverse engineering.
The order has asked Ahmed to forfeit approx $12.3 million in crypto. He also has to pay restitution of more than $5 million to the affected exchanges.
This action comes in when the crypto industry is already dealing with theft, scams, and regulatory challenges. The US Securities and Exchange Commission’s (SEC) approach toward the market shows it all.
The global digital assets market is down by 0.7% over the last day. The total market cap stands at around $2.58 trillion.
