$9 million crypto fraud on DeFi: a former engineer arrested in the USA

Scam with a smart contract. In a new crypto scam case, a former security engineer has been apprehended in New York for his alleged part in a massive fraud on a decentralized exchange (DEX).

Shakeeb Ahmed, 34, is accused of organizing a $9 million scam using smart contracts. Authorities followed a complex path of blockchain transactions, which ultimately led to his arrest. We explain to you.

Heist on DeFi: the engineer who burns his wings

Shakeeb Ahmed, a former security engineer once considered an expert, found himself behind bars for acts which claimed many victims.

In July 2022, he allegedly exploited a vulnerability in a smart contract on an undisclosed decentralized exchange by US justice. By manipulating pricing data, Ahmed allegedly managed to generate artificially inflated fees, amounting to nearly $9 million in cryptocurrency.

Despite his efforts to cover his tracks, authorities were quick to spot Ahmed’s suspicious transactions on the blockchain.

“We also allege that he then laundered the stolen funds through a series of complex blockchain transfers where he swapped cryptocurrencies, hopped on different blockchains, and used overseas crypto exchanges (… ) But none of these actions covered the defendant’s trail or deceived law enforcement, and they certainly did not stop my office or our law enforcement partners from following the money. .”

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The game of cat and mouse with American justice

He allegedly tried to launder the stolen funds by transferring them through a series of complex movements between different blockchains and using foreign cryptocurrency exchanges.

However, these maneuvers failed to conceal his illegal activities and investigators were able to trace him. Along with his fraudulent acts, Ahmed is said to have searched online in an attempt to evade authorities and retain his illegally acquired fortune.

He would have consulted information on ways to cross borders with digital assets, as well as strategies to prevent government agencies from seizing his assets. His research revealed a clear desire to avoid the consequences of his actions.

This engineer managed to steal $9 million from a DEX

Prison case for the crypto thief

Charges against Shakeeb Ahmed, including wire fraud and money laundering, could carry a maximum sentence of 20 years in prison.

This arrest, along with the legal actions taken against other individuals implicated in similar frauds, sends a strong message to potential cryptocurrency fraudsters. A message that justice and the american regulator hammer with every blow of the net as here by the voice of the prosecutor Williams in charge of the case:

“Ahmed also searched the internet or visited websites related to his ability to flee the United States, avoid extradition, and retain his stolen cryptocurrency: he searched for the terms ‘can I cross the border with crypto”, “how to prevent the federal government from seizing assets” and “buying citizenship (…) This is the second case that we are announcing this week to shed light on fraud in the ecosystem of cryptocurrencies and assets digital »

You are an avid reader of the Coin Journal, you know this refrain all too well, but it is important to remember that our young ecosystem is full of scams and exploits exploited for dishonest purposes. It is crucial to protect yourself by remaining vigilant and diversifying your investments. Recently, a crypto Ponzi scam has been busted, leaving many victims in dire straits.

In crypto, do not economize on caution! So, to keep your crypto assets safe, the best solution is still a personal hardware wallet. At Ledger, there is something for all profiles and all cryptos. Do not wait to put your capital in safety (commercial link)!

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