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Nirvana Finance Hacker Surrenders More Than $12.3 Million, After Pleading Guilty

2 mins
Updated by Kyle Baird
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In Brief

  • Senior security engineer Shakeeb Ahmed confesses to hacking two crypto exchanges, marking the first smart contract breach conviction.
  • U.S. Attorney Damian Williams lauds law enforcement's swift action in bringing Ahmed to justice for the $12.3 million cybercrime.
  • Ahmed's sophisticated hacks on Nirvana Finance involved a $10 million flash loan, leading to a $3.6 million profit and platform closure.
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Shakeeb Ahmed, a senior security engineer, has admitted to hacking two decentralized cryptocurrency exchanges, marking the first-ever conviction for a smart contract breach.

The announcement was made by the United States Attorney for the Southern District of New York following Ahmed’s guilty plea to the fraud charges.

Nirvana Finance Hacker Holds Extensive Expertise in Smart Contracts

According to the statement, Ahmed’s exploits involved the July 2022 hack of Nirvana Finance and another attack on a decentralized crypto exchange.

As part of his plea, Ahmed agreed to forfeit $12.3 million. This includes approximately $5.6 million in fraudulently obtained crypto.

US Attorney Damian Williams highlighted the significance of Ahmed’s conviction. He emphasized that regardless of the complexity of cyber methods, fraudulent activities would be promptly identified and prosecuted.

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The statement alleges that Ahmed has expertise in reverse engineering smart contracts and blockchain audits. He reportedly executed the hacks while employed as a senior security engineer for an international technology company.

Meanwhile, the first attack targeted a crypto exchange, where Ahmed exploited a smart contract vulnerability, causing it to produce around $9 million in inflated fees.

However, after successfully withdrawing the funds, Ahmed engaged in negotiations with the exchange. He allegedly offered to return most of the stolen funds in exchange for not involving law enforcement.

Nirvana Finance hack movement of funds flow chart. Source: Watcher Guru
Nirvana Finance hack movement of funds flow chart. Source: Watcher Guru

Ahmed Employed Sophisticated Methods to Mask Illicit Profits

The statement further explains how Ahmed took out an attack against Nirvana Finance.

Ahmed leveraged a flash loan of $10 million, manipulating the protocol’s smart contracts to reap a $3.6 million profit. Despite Nirvana’s offer of a bug bounty, Ahmed demanded $1.4 million, leading to the platform’s closure.

To conceal his illicit gains, Ahmed employed advanced laundering techniques. This included token-swap transactions, blockchain bridging, Monero exchanges, and the use of crypto mixers.

Following the attacks, Ahmed actively sought information about his criminal liability, criminal defense strategies, and ways to flee the US.

He conducted internet searches related to “defi hacks,” law enforcement investigations, and methods to prevent asset seizure.

Shakeeb Ahmed, 34, faces a maximum sentence of five years in prison and has agreed to pay restitution totaling $5,071,074.23 to his victims.

His sentencing is scheduled for March 13, 2024, before United States District Judge Victor Marrero.

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.