- Shakeeb Ahmed sentenced to three years for hacking two decentralized cryptocurrency exchanges, stealing over $12 million.
- Ordered to forfeit all stolen crypto and pay restitution exceeding $5 million to the affected exchanges.
- Used advanced skills and sophisticated methods to execute hacks and launder stolen funds.
Shakeeb Ahmed, a former security engineer, has been sentenced to three years in prison for his role in the hacking of two decentralized cryptocurrency exchanges, resulting in the theft of over $12 million. This landmark case, handled by the United States Attorney for the Southern District of New York, marks a significant development in the legal actions against cybercrimes involving cryptocurrency.
Hacks and Legal Repercussions
Ahmed’s criminal activities included sophisticated hacks into two separate cryptocurrency exchanges. The first incident, which occurred in early July 2022, involved manipulating pricing data to illicitly extract approximately $9 million. After the hack, Ahmed negotiated with the exchange to return the stolen funds except for $1.5 million, which he demanded to keep in exchange for not involving law enforcement.
The second attack, just weeks later at Nirvana Finance, exploited vulnerabilities in the exchange’s smart contracts allowing him to purchase and then resell cryptocurrency at manipulated prices. This attack drained Nirvana of roughly $3.6 million, leading to its subsequent closure.
Sophisticated Laundering Techniques
Following these thefts, Ahmed engaged in a complex scheme to launder the stolen funds, utilizing token swaps, blockchain bridging, and anonymized cryptocurrencies to obscure their origin. His tactics included using international cryptocurrency exchanges and mixing services to further complicate tracking efforts.
Court Sentencing and Future Implications
In response to these crimes, U.S. District Judge Victor Marrero sentenced Ahmed to a prison term, of three years of supervised release, and ordered him to forfeit the stolen amount and additional cryptocurrency assets. He must also pay restitution to the compromised exchanges totaling over $5 million.
This case underscores the growing challenge of cryptocurrency-related crimes and the legal system’s resolve to prosecute such offenses effectively. As the technology landscape evolves, this sentencing highlights the inevitable consequences for those engaging in cryptocurrency hacks and the ongoing efforts to safeguard digital assets in the financial sector.
