Former Security Engineer Sentenced to 3 Years in Prison for Stealing $12.3 Million from Crypto Exchange

A former security engineer has been sentenced to three years in prison in the U.S. for hacking two decentralized cryptocurrency exchanges in July 2022 and stealing over $12.3 million. Shakeeb Ahmed, the defendant, pleaded guilty to one count of computer fraud in December 2023 following his arrest in July. The U.S. Department of Justice noted that Ahmed used his specialized skills in reverse engineering smart contracts and blockchain audits to execute the hacks. The name of the company he worked for was not disclosed, but he was residing in Manhattan, New York, and working for Amazon before his arrest. Court documents revealed that Ahmed exploited a security flaw in a cryptocurrency exchange’s smart contracts to generate inflated fees and withdraw millions of dollars. He then contacted the company and offered to return most of the funds if they agreed not to alert law enforcement. Ahmed has also been accused of carrying out an attack on a second cryptocurrency exchange called Nirvana Finance, siphoning $3.6 million and leading to its shutdown. He laundered the stolen funds using cross-chain bridges and mixers. In addition to the prison sentence, Ahmed has been ordered to forfeit the stolen funds and pay restitution to the impacted exchanges.