Computer security engineer Shakeeb Ahmed has been sentenced to three years in prison, followed by three years of supervised release, by the Southern New York District (SDNY) Court. Ahmed was convicted of carrying out flash loan attacks on the decentralized Crypto Exchange and Nirvana exchanges in 2022.
U.S. Attorney Damian Williams stated that Ahmed’s conviction marked the first for hacking a smart contract. As part of his sentencing, Ahmed has been ordered to forfeit $12.3 million, along with “a significant quantity of cryptocurrency,” and pay $5 million in restitution to the exchanges.
Ahmed had offered to return all the stolen funds to Crypto Exchange, except for $1.5 million, on the condition that the exchange did not involve law enforcement. Nirvana offered him $600,000 for the return of the funds, but Ahmed demanded $1.4 million, out of the $3.6 million he had hacked, and no agreement was reached.
In related news, in 2023, stolen crypto worth $674 million was successfully recovered. The hack caused Nirvana’s NIRV stablecoin to depeg from the U.S. dollar, leading to an 85% drop in its native ANA coin, which subsequently closed. The SDNY statement noted that Ahmed had laundered the hacked funds. It was also discovered that a third exchange, Crema, had been targeted with a similar attack in July 2022, although federal charges did not link Ahmed to that particular hack.
At the time of the attacks, Ahmed was employed as a senior security engineer for an international technology company. According to Bloomberg, he was the technical lead of Amazon’s bug bounty program.
Following his release on bail, Ahmed is now reportedly working for a mental health care startup, as per Inner City Press. In a statement, Ahmed mentioned, “I witnessed hacks, I found a way to exploit an exchange’s smart contracts. I went into therapy” during his trial.
Ahmed was arrested in New York in July and charged with wire fraud and money laundering in connection with the hacks. He later pleaded guilty to a single charge of computer fraud in December.