As regulators and law enforcement worldwide vie to show how tough they are on cryptocurrency fraud and scams, Damian Williams, District Attorney for the Southern District of New York (SDNY), on Tuesday announced a major bust.
In a clip posted on Twitter, Williams stated that his office had racked up a law-enforcement first. Namely, the first-ever charges against the bad actor behind an attack on a smart contract on a decentralized cryptocurrency exchange. The SDNY’s indictment does not name the exchange, saying only that it launched overseas and runs on the Solana blockchain.
The SDNY District Attorney’s Indictment
Williams said that Shakeeb Ahmed, “a senior security engineer at an international technology company,” defrauded the exchange’s users of about $9 million in cryptocurrency. Ahmed then allegedly laundered the stolen funds by swapping currencies, moving among blockchains, and hiding money in far-flung exchanges.
But none of these maneuvers were enough to evade Williams’s office and its law enforcement partners, the DA said. Williams described his office as at the forefront of nabbing bad actors who misuse new technologies to commit what are, at bottom, old types of fraud.
The SDNY indictment details not only Ahmed’s alleged misdeeds, but continuing vulnerabilities in crypto exchanges. According to the indictment, Ahmed in July 2022 was a senior security engineer at “a leading international technology company” not affiliated with the exchange that fell victim.
His background came in handy here. Ahmed allegedly drew upon his knowledge of reverse engineering smart contracts and blockchain audits to carry out the theft.
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Author: Michael Washburn
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