Computer security engineer Shakeeb Ahmed has been sentenced to three years in prison followed by three years of supervised release in the Southern New York District (SDNY) Court. Ahmed was found guilty of executing flash loan attacks on decentralized Crypto Exchange and Nirvana exchanges in 2022.
U.S. Attorney Damian Williams stated that Ahmed’s conviction marked the first time someone had been prosecuted for hacking a smart contract. As part of his sentence, Ahmed has been ordered to forfeit $12.3 million, along with “a significant quantity of cryptocurrency,” and pay $5 million in restitution to the affected exchanges.
Ahmed had offered to return all the stolen funds to Crypto Exchange, excluding $1.5 million, on the condition that the exchange didn’t involve law enforcement. Nirvana, on the other hand, offered him $600,000 for the return of the funds, but Ahmed demanded $1.4 million out of the $3.6 million he had stolen. No agreement was reached between them.
In the aftermath of the hack, Nirvana’s NIRV stablecoin experienced a significant depeg from the U.S. dollar, leading to an 85% decrease in the value of its native ANA coin. The exchange eventually closed down. According to the SDNY statement, Ahmed laundered the hacked funds. It was also discovered that a third exchange, Crema, had suffered a similar attack in July 2022 using the same methods, but the federal charges did not connect Ahmed to that specific hack.
At the time of the attacks, Ahmed was working as a senior security engineer for an international technology company. According to Bloomberg, he served as the technical lead for Amazon’s bug bounty program.
Following his release on bail, Ahmed is currently employed at a mental health care startup, as reported by Inner City Press. In a statement, he shared, “I witnessed hacks, I found a way to exploit an exchange’s smart contracts. I went into therapy” during his trial.
Ahmed was arrested in New York in July and faced charges of wire fraud and money laundering in connection with the hacks. He later pleaded guilty to a single charge of computer fraud in December.
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