- The US has charged a hacker in the first-ever smart contract criminal hack.
- The attacker, a former engineer, stole $9 million worth of crypto and was charged with defrauding a decentralized exchange.
- The US Attorney said the criminal’s disguise attempts didn’t stop law enforcement from following the money.
U.S. Attorney Damian Williams announced, in a Twitter video, details of the first-ever smart contract criminal hack. The attacker, Shakeeb Ahmed, was charged with wire fraud and money laundering after allegedly stealing $9 million worth of cryptocurrency from a decentralized exchange (DEX).
Ahmed, who was a senior security engineer at Amazon, used his skills in reverse engineering smart contracts and blockchain audits to hack the software. In July 2022, he took advantage of a vulnerability found within the decentralized crypto exchange’s smart contract. By injecting false pricing data, he succeeded in generating $9 million worth of illicit funds.
Moreover, the hacker attempted to conceal the source of the funds by laundering the stolen crypto in a series of transactions. The U.S. Department of Justice stated, “He [Ahmed] laundered the stolen funds through a series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges.”
Attorney William addressed the attacker’s laundering actions and said, “None of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my office or our law enforcement partners from following the money.”
Meanwhile, the targeted DEX offered $800,000 to the hacker if he returned all the stolen crypto, or they would refer to law enforcement. Ahmed reached out and proposed a different offer. In his proposal, he would keep $2.5 million, and in return, the DEX should refrain from reporting the attack to law enforcement for investigation.
However, the DEX replied to Ahmed that they started applying for legal support and that it wouldn’t take long for them to find him. Ahmed then kept $1.5 million and provided detailed information about the vulnerabilities in the crypto exchange platform and how to improve the code. Attorney Williams stated:
It doesn’t matter whether someone steals money from a bank or defrauds a decentralized crypto exchange — it’s all fraud, plain and simple.
Most of the Twitter community’s comments were positive. One user lauded the enforcement efforts, saying, “This is the enforcement we like.” Another user also said, “Game is over criminals, Blockchain doesn’t lie!”
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