U.S. authorities arrested former security engineer Shakib Ahmed on suspicion of hacking an unnamed decentralized exchange worth $9 million.
He was charged with wire fraud and money laundering. Law enforcement described this case as the “first criminal case” involving smart contracts.
U.S. Attorney for the Southern District of New York Damian Williams said the suspect laundered the stolen funds through a “series of complex transfers, cross-chain moves and overseas cryptocurrency exchanges”.
According to authorities, in July 2022 Ahmed exploited a vulnerability in one of the exchange’s smart contracts and input false price data. This caused the protocol to generate about $9 million in inflated fees, which the defendant obtained unlawfully.
Subsequently, the arrested individual offered to return the stolen funds to the platform, keeping $1.5 million as a reward if the exchange team did not report to the police.
Ahmed allegedly searched the web for news articles about hacking, information about intrusions and criminal liability for these actions. Several of his queries included “escape from the country with cryptocurrency” and “acquiring citizenship”.
“None of these actions concealed the defendant’s tracks, did not deceive law enforcement, and, of course, did not hinder the agency or our partners from tracing the money,” the prosecutor said.
Under the charges, Ahmed faces up to 20 years in prison.
Earlier in November 2022 arrested 33-year-old Russian Mikhail Vasilyev on suspicion of large-scale hacker attacks using the LockBit ransomware.
Later the U.S. Department of Justice said it captured 20-year-old Russian Ruslan Astamirov for distributing the same ransomware.
In July 2023 in Canada arrested two teenagers for stealing $4.2 million in cryptocurrency from a U.S. citizen.