The fall of an ex-Amazon engineer for DeFi hacking 🚨
In a groundbreaking legal development, former Amazon engineer Shakeeb Ahmed has been sentenced to three years in prison for orchestrating hacks on two decentralized finance (DeFi) cryptocurrency exchanges, leading to the theft of over $12 million.
DeFi Hacker Sentenced to 3 Years in Prison
- Ahmed leveraged his knowledge of reverse engineering and blockchain audits to manipulate smart contracts on the exchanges.
- The US District Judge Victor Marrero delivered the sentence, marking a significant milestone in crypto-related law enforcement.
- This case represents the first-ever conviction for hacking a smart contract, as stated by US Attorney Damian Williams.
“No matter how innovative or sophisticated the hack, this Office and our law enforcement partners are committed to following the money and bringing hackers to justice. And as today’s sentence shows, time in prison — and forfeiture of all the stolen crypto — is the inevitable consequence of such destructive hacks,” Williams emphasized.
Ahmed’s actions on July 2 and 3, 2022, involved injecting fake pricing data into the first exchange, resulting in $9 million in inflated fees, which he then illicitly withdrew. He later engaged in a conversation with the exchange, agreeing to return most of the stolen funds but keeping $1.5 million unless the attack was not reported to authorities.
Shortly after, on July 28, Ahmed identified a vulnerability in Nirvana Finance’s smart contracts, leading to a $3.6 million drain from the platform, causing it to cease operations. Despite Nirvana’s bug bounty offer, Ahmed chose to retain the stolen assets.
He resorted to sophisticated laundering methods to conceal the origins of the stolen funds, such as token swapping across blockchains, converting assets to the untraceable crypto Monero, and leveraging overseas exchanges and cryptocurrency mixers.
In addition to the prison term, Ahmed has been instructed by the court to forfeit about $12.3 million in stolen assets, pay more than $5 million in restitution to the affected exchanges, and undergo three years of supervised release post-incarceration.
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