Senior security engineer Shakib Ahmed admitted to hacking the Nirvana Finance protocol and another unnamed decentralized exchange (DEX).
According to the statement, Ahmed agreed to return $12.3 million he obtained from the exploits and pay $5.07 million in compensation. The U.S. Attorney’s Office said in the summer of 2022, Ahmed used a smart contract vulnerability in an unnamed Solana-based exchange to steal funds.
A few weeks later, hackers launched another attack on another Nirvana Finance project. Protocol officials offered him $500,000 in compensation for the return of the funds, but the parties were unable to reach an agreement.
The U.S. District Court for the Southern District of New York found Shakib Ahmed guilty of hacking smart contracts and stealing assets. US Attorney Damian Williams said Shakib Ahmed’s case was the first conviction for such hacking.
“My office announced the first arrests related to attacks on smart contracts. Today, Senior Security Engineer Shakeeb Ahmed pleaded guilty and agreed to return all stolen cryptocurrency to the victims.”
Damien Williams, U.S. Attorney
Ahmed could face up to five years in prison. The final ruling in this case will be made on March 13, 2024.
Fraud in the cryptocurrency industry is becoming increasingly visible to U.S. authorities. According to the Internal Revenue Service, four of the 10 most serious cryptocurrency crimes this year were related to cryptocurrencies.
US regulators began targeting the biggest players in the cryptocurrency market after the FTX cryptocurrency exchange went bankrupt in November 2022. Since the beginning of this year, US regulators, particularly the Securities and Exchange Commission (SEC), have filed several lawsuits against some of the major cryptocurrency market participants or asset issuers. At the same time, banks providing account and payment processing services to cryptocurrency platforms were also attacked.