Previously employed as a security specialist, Shakeeb Ahmed now faces a three-year prison term for orchestrating the theft of approximately $12 million from two digital currency platforms. The sentence was handed down by a federal judge who additionally mandated three years of post-release supervision.
Details of the Crypto Exchange Hacks
Shakeeb Ahmed was arrested and charged with wire fraud and money laundering for stealing approximately $9 million from Crema Finance, a decentralized cryptocurrency exchange (DEX) built on the Solana blockchain.
A U.S. District Judge handed down a three-year prison sentence to SHAKEEB AHMED today for illegally accessing two decentralized exchanges, Nirvana Finance among them, and making off with over $12 million in cryptocurrency. This marks the first conviction in the U.S. for hacking smart contracts.
— Wu Blockchain (@WuBlockchain) April 12, 2024
Ahmed manipulated smart contracts by providing misleading pricing data, enabling him to illegally collect excessive fees on 21 flash loans from the decentralized exchange’s liquidity pool, according to the US Department of Justice.
Besides the incident involving the theft from Crema Finance, Ahmed was also implicated in a heist worth over $12 million from Nirvana Finance. Confessing to the computer fraud charge, Ahmed was taken into custody in July 2022, and his trial ensued in December of the same year.
Shakeeb Ahmed Sentencing and Restitution
During the trial, federal prosecutors proposed a four-year prison sentence for Ahmed, considering the severity of the committed crimes. However, his cooperation was also taken into account. In the end, the judge decided on a three-year imprisonment term for Ahmed, ordering him to relinquish $12.3 million and pay back $5 million as restitution.
Ahmed’s lawyer asked for mercy in his defense because Ahmed openly acknowledged a second hack on Nirvana Finance. This confession put their plea agreement at risk. However, the judge decided on imprisonment to underscore the seriousness of Ahmed’s actions.
Impact on the Cryptocurrency Industry
U.S. Attorney Damian Williams secured the first conviction for hacking a smart contract, marking a significant development in the ongoing debate about cybersecurity and fraud in the cryptocurrency sector.
The goal of pursuing these cybercrime cases is to clarify the legal consequences for individuals involved in online theft and misusing digital currency technology infrastructures.
The sentencing of Ahmed serves as a reminder of the unrelenting work by law enforcement in tracking down and prosecuting criminals who attempt to manipulate the digital financial sector, no matter how complex their methods may be.
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2024-04-12 20:39