Former Tech Engineer Arrested for $9M Crypto Heist from Solana-Based Exchange

Charges Against Computer Engineer for Crypto Heist

Shakeeb Ahmed, a former security engineer for a global tech company, has been taken into custody and accused of stealing $9 million in digital assets from a decentralized cryptocurrency exchange built on the Solana network, via exploiting a software flaw in a smart contract.

Damian Williams Announces First-ever Criminal Case Related to DEX Attack

On June 11th, Damian Williams, serving as the United States Attorney for the Southern District of New York, made public what is considered to be the first criminal case of an assault on a smart contract operated by a decentralized exchange (DEX).

The Accused Allegedly Abused a Smart Contract Loop Hole

Williams claims that Ahmed capitalized on his tech expertise to deceive the exchange and its users, embezzling cryptocurrency valued around $9 million. The attack in question, executed in July 2022, was directed towards a Solana-based DEX and involved Ahmed manipulating a security flaw in the exchange's smart contracts to create overinflated fees using flash loans.

Crypto Laundering Via Complex Blockchain Transfers

Ahmed subsequently withdrew the ill-gotten funds and laundered them through intricate transfers on the blockchain. This included swapping different cryptocurrencies, shuffling between various crypto blockchains, and using international crypto exchanges.

Crema Finance: A Potential Victim?

Even though Williams didn’t reveal the identity of the DEX exploited, previous reports from Cointelegraph indicate that an anonymous hacker took advantage of the Solana-based liquidity protocol Crema Finance on July 2, 2022, pilfering digital currency worth $9.6 million. However, the hacker later returned most of the funds, keeping $1.6 million as a white hat bounty.

Law enforcement Not Fooled Despite Return of Stolen Funds

Williams shared that Ahmed also repaid all of the stolen funds, withholding $1.5 million, on the condition that the crypto exchange refrains from involving law enforcement. Despite this, Williams affirmed that these actions neither concealed Ahmed’s trail nor tricked the law enforcement and that his office and their partners successfully traced the money. Ahmed is currently facing charges of wire fraud and money laundering relating to the Solana-based DEX attack.