A former security engineer Shakeeb Ahmed has been sentenced to three years in prison. Ahmed was convicted of hacking and stealing funds worth $12 million from two decentralized exchanges. Additionally, United States District Judge Victor Marrero also ordered him to forfeit about $12.3 million.
United States District Court sends hacker to prison
According to the report, Ahmed was accused of hacking two decentralized exchanges (DEX), making this a first-ever conviction for a smart contract hack. The former software engineer was also ordered to forfeit digital assets alongside the funds. In a statement from the United States Attorney’s Office, Shakeeb Ahmed has also been ordered to pay around $5 million to Nirvana and an unnamed DEX.
Shakeeb Ahmed was initially charged for exploiting a vulnerability in one of the decentralized exchange’s smart contracts. He was said to have used fake pricing data to generate more than $9 million in inflated fees. After carrying out the act, he converted the fees into a cryptocurrency and withdrew it. After the act, the DEX was able to contact him and he agreed to return $1.5 million of the loot if they didn’t contact the police.
A few weeks after the first hack, Ahmed struck again on another DEX Nirvana Finance. He exploited a vulnerability in the platform’s smart contract that allowed him to purchase tokens for less than its original value. After the act, he immediately resold the tokens to the platform at the original value. Nirvana contacted and offered him a $600,000 bug bounty fee but he asked for $1.4 million. The two parties could not reach an agreement so he kept the whole funds.
Legal implications and court verdict
After carrying out his actions, Ahmed tried to cover his tracks through several methods including bridging the tokens from the Solana blockchain to Ethereum. Consequently, he converted the stolen funds into privacy token Monero. However, despite deploying several measures to mask his acts, he was arrested by law enforcement agents in July 2023.
Giving his verdict on the sentencing, United States Attorney Damian Williams thumbed up the decision to send the perpetrator to jail. “Today, Shakeeb Ahmed was sentenced to prison in the first-ever conviction for the hack of a smart contract and ordered to forfeit all of the stolen cryptos. 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,” he said.
