Senior Security Engineer Pleads Guilty to Hacking Two Crypto Platforms
Shakeeb Ahmed, a 34-year-old senior security engineer, has admitted to exploiting the Nirvana Finance protocol and another decentralized cryptocurrency exchange, as announced by the U.S. Attorney’s Office for the Southern District of New York on Thursday.
Ahmed has agreed to forfeit $12.3 million obtained from the two hacks and will also pay $5 million in restitution to the victims.
First Ever Conviction for Smart Contract Hack
The U.S. attorney, Damian Williams, stated that this is the first ever conviction for an attack on a smart contract. This follows the first ever arrest in a similar case five months ago.
Exploits in 2022
In July, Ahmed was charged with wire fraud and money laundering. The indictment revealed that he exploited a vulnerability in a smart contract of an unnamed Solana-based exchange, which is believed to be Crema Finance.
A few weeks later, Ahmed carried out a $3.6 million attack on Nirvana Finance using a flash loan and an exploit he discovered in the platform’s smart contracts. Despite being offered a $600,000 bounty for returning the stolen funds, Ahmed demanded $1.4 million instead and no agreement was reached.
Sophisticated Money Laundering Techniques
Ahmed laundered the stolen funds using various sophisticated techniques such as token-swap transactions, transferring fraud proceeds from the Solana blockchain to Ethereum, converting fraud proceeds into Monero (a difficult-to-trace cryptocurrency), using overseas cryptocurrency exchanges, and employing cryptocurrency mixers like Samourai Whirlpool.
Possible Sentence
Ahmed could face up to five years in prison and is scheduled to be sentenced on March 13.
Hot Take: Senior Security Engineer Pleads Guilty to Hacking Crypto Platforms
Shakeeb Ahmed, a senior security engineer, has admitted to exploiting vulnerabilities in the Nirvana Finance protocol and another decentralized cryptocurrency exchange. This marks the first ever conviction for an attack on a smart contract. Ahmed’s sophisticated money laundering techniques involved transferring funds between different blockchains and using anonymized cryptocurrencies. As he awaits sentencing, this case highlights the ongoing need for robust security measures in the crypto industry.
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