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NEW YORK, NY โ Shakeeb Ahmed, a former senior security engineer, was sentenced to three years in prison for hacking two decentralized cryptocurrency exchanges and stealing more than $12 million in cryptocurrency. The sentence, handed down by U.S. District Judge Victor Marrero, includes three years of supervised release, and Ahmed must also forfeit the stolen funds and pay restitution in excess of $5 million.
Federal Prosecutor Damian Williams announced the sentence and emphasized the significance of it being the first conviction for hacking a smart contract. Ahmed's attacks involved exploiting weaknesses in exchanges' systems to manipulate transactions and price data for personal gain. In July 2022, he defrauded an exchange of approximately $9 million and then attempted to negotiate immunity from prosecution in exchange for returning the stolen funds. A subsequent attack in late July led to the theft of $3.6 million from Nirvana Finance, leading to the platform being shut down.
The sophisticated laundering techniques Ahmed employed included the use of token swap transactions, pooling funds between different blockchains, and converting assets into Monero, an anonymous cryptocurrency. These methods complicated efforts to trace the stolen funds.
Ahmed's technical expertise in reverse engineering and blockchain audits, gained throughout his career as a security engineer, played a crucial role in his ability to carry out these crimes. The case highlights the current challenges and risks associated with protecting digital assets in the rapidly evolving landscape of decentralized finance.
