A Former Amazon Engineer Pleads Guilty to Hacking Cryptocurrency Exchanges
A former Amazon engineer, Shakeeb Ahmed, has pleaded guilty to hacking two cryptocurrency exchanges, resulting in the first-ever conviction involving the hacking of a smart contract. Ahmed now faces up to five years in prison and must forfeit $12.3 million worth of stolen cryptocurrency. The hacks took place in 2022 and targeted Nirvana Finance and an undisclosed crypto exchange on the Solana blockchain.
Ahmed’s Manipulation of Smart Contracts
Ahmed manipulated the contracts by submitting falsified data, generating millions of dollars in inflated fees that he had not rightfully earned. Smart contracts are digital programs that execute functions when specific conditions are met. They operate on blockchain platforms and offer increased security and automation. Ahmed used his skills acquired at Amazon to reverse-engineer the necessary steps for manipulating the exchanges.
Ahmed Tapped an Exchange to Obscure His Tracks
To obscure his tracks, Ahmed engaged in negotiations with the unnamed crypto exchange, proposing the return of all stolen funds, minus $1.5 million, on the condition that law enforcement was not involved. Prosecutors revealed this attempt to evade accountability. After successfully hacking the first exchange, Ahmed exploited a feature within Nirvana’s smart contract to inflate the token price after a significant purchase.
Complicating Tracing of Activities
To complicate the tracing of his activities, Ahmed attempted to obfuscate the stolen crypto by converting it into Monero, using cryptocurrency mixers, jumping across different blockchains, and utilizing overseas crypto exchanges. These incidents highlight ongoing security challenges within the crypto industry.
Hot Take: Record-High Month for Crypto Exploits
In Q3 2023, there were 76 hacks reported on crypto and Web3 projects and firms, compared to 30 hacks in the same period in 2022. These incidents resulted in approximately $332 million lost to exploits, hacks, and scams in September alone, marking a record-high month for crypto exploits.
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