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First Ever Conviction for Decentralized Exchange Hack: New Yorker Pleads Guilty

15/12/2023 05:05

According to Decrypt, Shakeeb Ahmed, a 34-year-old New York native, pleaded guilty to charges related to hacks on two decentralized cryptocurrency exchanges, including the July attack on Solana decentralized exchange Nirvana Finance. This marks the first ever conviction for such a hack, according to Damian Williams, U.S. attorney for the Southern District of New York. Ahmed exploited vulnerabilities in the exchanges' smart contracts to steal over $12 million in funds, which he has agreed to forfeit as part of his plea. Ahmed tricked one exchange into granting him $9 million in false fees last July and stole $3.6 million from Nirvana Finance by manipulating smart contracts. He was arrested in July and attempted to hide the stolen funds through cryptocurrency mixing services, blockchain transfers, and overseas accounts. Ahmed also researched how to flee prosecution, searching for terms like 'evidence laundering' and 'buying citizenship.' Prosecutors say that Ahmed used a $10 million flash loan to pull off his attack on Nirvana. He discovered an exploit in Nirvana's smart contracts, which allowed him to purchase ANA at a low price and resell it for a profit of approximately $3.6 million. After the attack, Nirvana offered Ahmed a bug bounty of up to $600,000 if he would return the rest of the funds, but he demanded to keep $1.4 million. When Nirvana refused, talks soured, and he kept all the stolen funds. The $3.6 million in stolen funds represented almost all the funds held by the Solana decentralized exchange, which shut down shortly after Ahmed's attack. Ahmed will be sentenced on March 13 by Judge Victor Marrero in the Southern District of New York and faces up to 5 years in prison for computer fraud.

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