The United States government has filed charges against a cybersecurity professional, Shakeeb Ahmed, for money laundering in connection with an attack on a Solana-based decentralized protocol. This marks the first enforcement action of its kind, with the U.S. Attorney for the Southern District of New York calling it the “first criminal case involving [an] attack on a smart contract operated by [a] decentralized exchange.”
According to the indictment, Shakeeb Ahmed, a senior security engineer at an unidentified company, allegedly exploited the smart contracts of a Defi exchange. By manipulating the platform’s price data, he was able to generate about $9 million in inflated fees.
To carry out the attack, the United States Attorney’s Office maintained that Ahmed utilized flash loans and employed his expertise in reverse engineering smart contracts and conducting blockchain audits.
After successfully stealing the funds as cryptocurrency, the accused reportedly attempted to negotiate with the crypto exchange. In exchange for not reporting the incident to law enforcement, he offered to return all but $1.5 million of the stolen funds. However, his attempts to cover his tracks and avoid detection were unsuccessful.
Sophisticated Money Laundering Techniques
Authorities revealed that Ahmed employed various methods to launder the stolen funds and obscure his transactions. These included token swaps, bridged transactions between Solana (SOL) and Ethereum (ETH), conversion of funds to the privacy coin Monero (XMR), and transactions on overseas cryptocurrency exchanges.
The Solana attacker further conducted extensive online searches related to the attack, his legal liability, defense attorneys, law enforcement capabilities, and evading criminal charges. He allegedly searched for terms like “defi hack,” “wire fraud,” and “evidence laundering.”
Furthermore, the Justice Department revealed that Ahmed also explored options for fleeing the United States, avoiding extradition, and safeguarding his stolen cryptocurrency, including searches like “Can I cross the border with crypto” and “buying citizenship.”
Shakeeb Ahmed now faces charges of wire fraud and money laundering, each carrying a potential maximum sentence of 20 years in prison. However, he is deemed innocent unless proven guilty in a court of law, as is the case in all criminal cases.
