Senior security engineer admits to hacking decentralized exchanges
A senior security engineer named Shakib Ahmed has confessed to hacking the Nirvana Finance protocol and another unidentified decentralized exchange (DEX). As part of his admission, Ahmed has agreed to return $12.3 million that he obtained through the exploit, along with paying $5.07 million in compensation.
Exploit on Solana-based exchange
The U.S. Attorney’s Office revealed that in the summer of 2022, Ahmed took advantage of a vulnerability in the smart contract of an unnamed Solana-based exchange to steal funds. A few weeks later, he carried out another attack on a different Nirvana Finance project. Although the protocol offered him a $500,000 reward for returning the funds, no agreement was reached between the parties.
First-ever conviction for hacking smart contracts
The Southern District of New York court has found Shakib Ahmed guilty of hacking smart contracts and stealing assets. This marks the first-ever conviction for such a hack. U.S. Attorney Damian Williams expressed this significance and stated that Ahmed will have to return all the stolen crypto to his victims.
Possible prison sentence
Ahmed could face a maximum sentence of five years in prison. The final verdict in his case is scheduled to be delivered on March 13, 2024.
Rise in cryptocurrency fraud cases
Fraud within the cryptocurrency industry is becoming more visible to U.S. authorities. The Internal Revenue Service reports that four out of the ten most significant crypto crimes this year were related to cryptocurrencies.
Regulatory crackdown on crypto market players
U.S. regulators have intensified their scrutiny of major players in the crypto market since November 2022, when the FTX cryptocurrency exchange went bankrupt. Throughout the year, regulatory bodies like the Securities and Exchange Commission have filed lawsuits against leading crypto market players and issuers of their assets. Banks providing services to cryptocurrency platforms have also faced regulatory action.
Hot Take: Crackdown on Crypto Fraud Continues
The recent conviction of a senior security engineer for hacking decentralized exchanges highlights the increasing efforts of U.S. authorities to combat fraud in the cryptocurrency industry. With the first-ever conviction for hacking smart contracts, it is clear that regulators are actively pursuing those who exploit vulnerabilities in the crypto space. This case serves as a warning to potential hackers and sends a message that these actions will not go unpunished. As more cases of crypto-related fraud emerge, it is expected that regulators will continue their crackdown on both individuals and major players in the market.
By
By
By