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 conducting flash loan attacks on the decentralized Crypto Exchange and Nirvana exchanges in 2022.
U.S. Attorney Damian Williams stated that Ahmed’s conviction marked the first hacking of a smart contract. As part of his sentencing, Ahmed has been ordered to forfeit $12.3 million, along with a significant amount of cryptocurrency, and pay the exchanges $5 million in restitution.
Ahmed had offered to return all the stolen funds from the Crypto Exchange, except for $1.5 million, if the exchange refrained from contacting law enforcement. Nirvana offered him $600,000 to return the funds, but Ahmed demanded $1.4 million out of the $3.6 million he had hacked. No agreement was reached.
Following the hack, Nirvana’s NIRV stablecoin depegged from the U.S. dollar, causing its native ANA coin to plummet by 85% before closing shortly after. According to the SDNY statement, Ahmed laundered the hacked funds. It was also noted that another exchange, Crema, was targeted in July 2022 using the same methods, but federal charges did not connect Ahmed to that particular hack.
At the time of the attacks, Ahmed was working as a senior security engineer for an international technology company. He was also the technical lead of Amazon’s bug bounty program, as reported by Bloomberg.
According to Inner City Press, Ahmed, who was released on bail, currently works for a mental health care startup. During his trial, Ahmed stated, “I witnessed hacks, I found a way to exploit an exchange’s smart contracts. I went into therapy.”
Ahmed was arrested in New York and initially charged with wire fraud and money laundering in connection with the hacks. In December, he pleaded guilty to a single charge of computer fraud.
Magazine: Pink Drainer creator defends his wallet draining crypto scam kit.