The malicious actor behind the Solana-based DEX exploit faces charges of wire fraud and money laundering.
Shakeeb Ahmed, an ex-security engineer from a prominent tech firm, is charged with involvement in an alleged theft of $9 million in crypto from a decentralized exchange (DEX) built on the Solana blockchain.
Ahmed's alleged use of a smart contract vulnerability for financial gain has landed him in hot water with the United States authorities.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Uniswap? (UNI Token Explained With Animation)
On July 11th, the United States Attorney for the Southern District of New York, Damian Williams, brought forth what he referred to as the "first-ever criminal case" centered on a decentralized exchange's (DEX) smart contract attack.
According to Williams, Ahmed carried out this act in July 2022, with the unnamed Solana-based DEX being his primary target.
It is believed that Ahmed took advantage of the DEX smart contracts' flaw to produce inflated fees using flash loans. These funds were subsequently extracted and washed through a "series of complex transfers" on the blockchain.
Ahmed reportedly swapped cryptocurrencies, moved across various crypto blockchains, and utilized foreign crypto exchanges to launder funds.
While Williams did not explicitly state which DEX was compromised in July, the sequence of events can be traced to Solana-based liquidity protocol's Crema Finance exploit on July 2nd, 2022, when malicious actors stole $9.6 million in crypto.
Interestingly, most of the funds were later returned, and the exploiter was granted $1.6 million as a white-hat bounty.
Similar to this occurrence, Williams' statement also noted that Ahmed returned the entirety of the stolen funds, barring $1.5 million. However, this was under the agreement that the crypto exchange refrained from involving law enforcement. Despite these actions, Williams noted:
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.
After being apprehended in New York, Ahmed now faces wire fraud and money laundering charges tied to his alleged attack on DEX.
Recently, two Canadian teenagers were arrested over manipulating a US resident and stealing $4.2 million in Bitcoin (BTC) and Ethereum (ETH).
