Info@NationalCyberSecurity
Info@NationalCyberSecurity

Security Engineer Gets 3-Year Prison Term for Hacking Decentralized Crypto Exchanges | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #hacker


The court sentenced Shakeeb Ahmed, a former senior security engineer, to three years in prison for hacking two separate decentralized crypto exchanges and stealing over $12 million worth of cryptocurrency.

Damian Williams, the United States Attorney for the Southern District of New York, announced the sentence, marking the first-ever conviction for the hack of a smart contract.

Key points:

  • Shakeeb Ahmed, a 34-year-old U.S. citizen from New York, pleaded guilty to computer fraud.
  • In July 2022, Ahmed hacked a decentralized cryptocurrency exchange using fake pricing data, generating approximately $9 million in inflated fees.
  • Ahmed also exploited a vulnerability in Nirvana Finance’s smart contracts, stealing $3.6 million and causing the platform to shut down.
  • In addition to the prison term, Ahmed was ordered to forfeit $12.3 million.

Read more: FTX Founder Sam Bankman-Fried To Challenge 25-Year Prison Term

According to a press release by the Department of Justice, Ahmed carried out the first crypto hacking attack on a decentralized cryptocurrency exchange on July 2 and 3, 2022.

Using fake pricing data, he generated approximately $9 million worth of inflated fees, which he then withdrew in the form of cryptocurrency. Following the theft, Ahmed began communicating with the exchange.

He also promised to return all stolen funds, except $1.5 million, if the exchange committed not to report the incident to authorities.

Ahmed also attacked Nirvana in July

Just a few weeks later, on July 28, 2022, Ahmed launched a second attack on Nirvana Finance, another decentralized cryptocurrency exchange.

Ahmed exploited a vulnerability in Nirvana’s smart contracts to purchase cryptocurrency at a lower price than the contract’s design. He then promptly resold it to Nirvana at a higher price.

Read more: Robert Kiyosaki Backs Cathie Wood’s $2.3 Million Bitcoin Price Prediction

Despite Nirvana’s offer of a “bug bounty” of up to $600,000 for the return of the stolen funds, Ahmed demanded $1.4 million and ultimately kept all of them, totaling $3.6 million. The loss represented nearly all of Nirvana’s funds, forcing the platform to shut down shortly after the attack.

Ahmed was a senior security engineer for an international technology company when the attacks happened. U.S. Attorney Damian Williams emphasized the significance of the conviction and sentencing, stating, “No matter how novel or sophisticated the hack, this Office and our law enforcement partners are committed to following the money and bringing hackers to justice.

Vignesh Karunanidhi

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

Vignesh Karunanidhi

Milk Road Writer

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

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