{"id":121219,"date":"2023-07-12T06:11:26","date_gmt":"2023-07-12T06:11:26","guid":{"rendered":"https:\/\/dripp.zone\/news\/new-york-prosecutor-charges-hacker-over-9m-exploit-of-solana-based-exchange-crypto-news\/"},"modified":"2023-07-12T06:11:29","modified_gmt":"2023-07-12T06:11:29","slug":"new-york-prosecutor-charges-hacker-over-9m-exploit-of-solana-based-exchange-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/new-york-prosecutor-charges-hacker-over-9m-exploit-of-solana-based-exchange-crypto-news\/","title":{"rendered":"New York prosecutor charges hacker over $9M exploit of Solana-based exchange\n – Crypto News"},"content":{"rendered":"
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A former security engineer for an international technology firm has been arrested and charged for allegedly using a smart contract bug to steal $9 million in cryptocurrency from a Solana-based decentralized crypto exchange.<\/p>\n

On June 11, the United States Attorney for the Southern District of New York Damian Williams announced the “first-ever criminal case” involving an attack on a smart contract operated by a decentralized exchange (dex<\/a>, <\/p>\n

In a statement, Williams claims the accused \u2014 Shakeeb Ahmed \u2014 \u201cused his expertise to defraud the exchange and its users and steal approximately $9 million in cryptocurrency.\u201d<\/p>\n

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US Attorney Damian Williams announces the first-ever criminal case involving an attack on a smart contract operated by a decentralized cryptocurrency exchange pic.twitter.com\/j3JPv2L612<\/a><\/p>\n

\u2014 US Attorney SDNY (@SDNYnews) July 11, 2023<\/a><\/p><\/blockquote>\n

Williams said the attack was carried out in July 2022 and was aimed at a Solana-based<\/a> dex. <\/p>\n

The attack involved exploiting a vulnerability in the exchange’s smart contracts to generate inflated fees with flash loans. <\/p>\n

These were then withdrawn and laundered through a “series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges.”<\/p>\n

While Williams did not disclose the DEX that was exploited in July, previous reporting from Cointelegraph reveals an unknown hacker exploited<\/a> Solana-based liquidity protocol Crema Finance on July 2, 2022, stealing $9.6 million in cryptocurrency. <\/p>\n

The exploiter later returned most of the funds but was allowed to keep $1.6 million<\/a> as a white hat bounty. <\/p>\n

Similarly, William’s statement also noted that Ahmed decided to return all of the stolen funds except for $1.5 million on condition the crypto exchange did not refer the attack to law enforcement. <\/p>\n

\u201cNone of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my Office or our law enforcement partners from following the money,\u201d he said. <\/p>\n

Ahmed was arrested in New York and has been indicted on charges of wire fraud and money laundering related to the attack on the Solana-based<\/a> DEX in July 2022.<\/p>\n

Cointelegraph contacted Crema Finance for clarification but did not immediately receive a response.<\/p>\n

Related: <\/em><\/strong>Crypto hacks and exploits snatch over $300M in Q2 2023<\/em><\/strong><\/a><\/p>\n

Responding to the recent news, crypto, and startup lawyer “Orlando.btc” commented that the move could be good for the overall DeFi ecosystem.<\/p>\n

The indictment indicates that the Department of Justice will “pursue criminal charges if a person intentionally uses a protocol in a way that it was not *intended* to be used,” <\/p>\n

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1\/ Today, the US Attorney’s Office for SDNY announced criminal charges for exploiting a DEX on @solana<\/a>,<\/p>\n

What does it mean for the rest of crypto?<\/p>\n

Your favorite startup founder & crypto lawyer read the indictment so you don’t have to.<\/p>\n

Let’s dig in.https:\/\/t.co\/NskuEeWgHn<\/a><\/p>\n

\u2014 orlando.btc \u2310\u25e8-\u25e8 (@Orlando_btc) July 11, 2023<\/a><\/p><\/blockquote>\n

Magazine: <\/em><\/strong>Should crypto projects ever negotiate with hackers? Possibly<\/em><\/strong><\/a><\/p>\n