US arrests hacker for stealing BRL 43 million in exchange cryptocurrencies By CriptoFácil

2023-07-13 00:17:23

© Reuters. US arrests hacker for stealing R$ 43 million in cryptocurrencies from exchange

CriptoFácil – The United States Department of Justice (DOJ) announced the arrest of a computer security engineer, accused of committing electronic fraud and money laundering. This is the first arrest case involving an attack on a smart contract in the decentralized exchange (DEX) sector. Shakeeb Ahmed, now in custody, is accused of stealing $9 million (R$ 43 million) in cryptocurrencies from a DEX.

The case, which is a first for the blockchain technology legal scene, was filed by Damian Williams, attorney for the Southern District of New York. At a press conference held on July 11, Williams highlighted the use of advanced technical skills by the defendant, a senior security engineer at an international technology company, to perpetrate the fraud.

“He used his knowledge to exploit a vulnerability in one of the cryptocurrency exchange’s smart contracts and insert false price data,” said Williams.

This manipulation allowed the suspect to trick the smart contract into generating fraudulent inflated fees, amounting to approximately $9 million.

Exchange cryptocurrency theft

The accused, having illicitly acquired the cryptocurrencies, sought to launder the assets through a series of complex transfers through various cryptocurrency exchanges. However, investigators, who followed the trail left by Ahmed, managed to capture the suspect.

While the DOJ report did not specify which DEX was the victim of the attack, speculation revolves around Crema Finance. Crema Finance experienced several exploits, and in July 2022 an attack manipulated asset prices and excessive fees through the Solend lending protocol.

Subsequently, the perpetrator returned more than $8 million worth of tokens, keeping around $1.6 million as a “reward”. The decision to return much of the stolen funds is likely what allowed authorities to track down the suspect.

“We are willing to crack down on those who try to take advantage of new technologies to commit old-fashioned fraud,” Williams declared, alluding to the government’s ongoing commitment to fighting cryptocurrency-related crime.

By CriptoFacil