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First Smart Contract Fraud Conviction: Engineer Admits to $12M Solana DeFi Heist

Image: U Today

Shakeeb Ahmed, a security engineer, has admitted to exploiting two Solana DeFi applications.

This confession comes after the U.S. Department of Justice’s announcement of a groundbreaking conviction in smart contract fraud.

Damian Williams, the U.S. Attorney for the Southern District of New York, made a statement revealing Ahmed’s guilty plea and his agreement to reimburse stolen cryptocurrency to the victims.

“Five months ago, my Office announced the first ever arrest involving an attack on a smart contract. Today … Shakeeb Ahmed pled guilty and agreed to return all of the stolen crypto to his victims … Today’s conviction shows that no matter how sophisticated the methods used, fraud is fraud, and we will swiftly catch and convict you.”

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Image: Decrypt

Not Only Once but a Second Attack on Nirvana Finance

The saga began on July 2, 2022, with Ahmed’s first attack on an unnamed decentralised exchange. He deceitfully generated $9 million through inflated transaction fees.

Despite his offer to return most of the funds in exchange for silence, authorities arrested him in July 2023. A subsequent attack targeted Nirvana Finance, a Solana-based platform.

Ahmed manipulated market mechanisms, purchasing and reselling Nirvana’s ANA token for a $3.6 million profit. His refusal to return these funds led to Nirvana’s financial collapse.

More than $12 Million Taken in Theft

Ahmed’s tactics included converting the stolen funds to Monero (XMR) and using various methods to obscure the trail. These included crypto mixers and transferring funds across blockchains.

His online activities also indicated a search for legal defence strategies and potential escape plans.

Ahmed now faces a maximum of five years in prison for computer fraud, with his sentencing set for March 2024. He has agreed to pay $5 million in restitution.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive.