Security Engineer Arrested for Stealing $9 Million from Crypto Exchange
The U.S. Department of Justice (DOJ) has arrested Shakeeb Ahmed, a security engineer, on charges of wire fraud and money laundering. The DOJ alleges that Ahmed stole $9 million worth of cryptocurrency from an unnamed decentralized cryptocurrency exchange (DEX) through a flash loan attack in July 2022. Here are the key points:
– Ahmed exploited a vulnerability in the smart contract of the DEX and inserted fake pricing data to generate inflated fees.
– He was able to withdraw approximately $9 million worth of cryptocurrency that he did not legitimately earn.
– The DEX operates on the Solana blockchain.
– Ahmed took out multiple flash loans, deposited them in the DEX’s liquidity pool, and claimed a large percentage as fees.
– He attempted to launder the funds by converting them into different cryptocurrencies, moving them across blockchains, and converting into monero (XMR).
The DOJ also revealed that Ahmed offered to return most of the stolen funds to the DEX on the condition that the developers did not involve law enforcement. Although the DEX was not explicitly named, the details align with the theft from Crema Finance, a Solana-based DEX, that occurred last year. Crema Finance developers have not yet provided a comment on the matter.
Hot Take
This case highlights the ongoing security risks in the crypto industry. Despite advancements in blockchain technology, vulnerabilities still exist, and bad actors continue to exploit them. It is crucial for exchanges and developers to prioritize security measures and for users to exercise caution when engaging with decentralized platforms.
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