Security Expert Shakeeb Ahmed Sentenced to Prison for Crypto Exchange Hacks
Summary:
Computer security expert Shakeeb Ahmed has been sentenced to three years in prison by the Southern New York District Court for hacking the Crypto Exchange and Nirvana exchanges. Additionally, he is required to surrender $12.3 million, an undisclosed amount of crypto, and pay $5 million in restitution. Despite his offer to return most of the stolen funds on the condition of no police involvement, no agreement was reached. It was the first conviction of its kind for breaching a smart contract, with damages leading to significant coin value depreciation. Following the cyberattacks, Ahmed was arrested, charged, and later pleaded guilty to a single count of computer fraud.
Shakeeb Ahmed, a computer security specialist, received a three-year prison sentence along with three years of probation in Southern New York District (SDNY) Court. Ahmed was convicted of executing flash loan assaults on Crypto Exchange and Nirvana exchanges in 2022. Damian Williams, U.S. Attorney, confirmed that this is the first-ever verdict for infiltrating a smart contract. Along with prison time, Ahmed has been instructed to surrender $12.3 million, a substantial amount of digital currency, and repay $5 million to the victim exchanges.
Ahmed proposed to refund all taken funds excluding $1.5 million to the Crypto Exchange, as long as they refrained from reporting to the police. Nirvana was ready to offer him $600,000 for a fund refund, but Ahmed demanded $1.4 million of the total $3.6 million he stole; the two parties couldn't reach an agreement.
As a consequence of the hack, NIRV, Nirvana’s stablecoin, detached from the U.S. dollar's value and its ANA coin plunged steeply by 85%, leading to closure shortly afterward. The SDNY statement explained that Ahmed laundered the stolen money by using token-swap transactions, bridging the stolen proceeds from the Solana blockchain to the Ethereum blockchain, converting fraud proceeds into Monero, using foreign digital currency exchanges, and using cryptocurrency mixers like Samourai Whirlpool.
Crema, another exchange platform, fell victim to a similar attack in July 2022, but Ahmed was not connected to this assault in federal charges. At the time of carrying out these cyberattacks, Ahmed worked as a senior security expert at an international tech firm. Bloomberg reports highlighted Ahmed as the technical head of the bug bounty program at Amazon. According to Inner City Press, the now-released-on-bail Ahmed is currently employed by a mental health service startup. They reported Ahmed confessing during his trial that he exploited an exchange's smart contracts after witnessing hacks, and subsequently sought therapy.
In July, Ahmed was taken into custody in New York on charges of wire fraud and money laundering related to the cyberattacks. Later in December, he pleaded guilty to a single count of computer fraud.
Published At
4/12/2024 9:08:55 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.