New York authorities have recorded a second indictment in as many days of a suspect accused of cryptocurrency fraud. In this case the defendant was initially hired to protect against the very crime he is alleged to have committed.
Shakeeb Ahmed, 34, of New York, was a senior cybersecurity engineer at an unspecified cryptocurrency exchange. But, the US Department of Justice (DoJ) alleges, instead of using his skills to defend his employer against digital currency heists, Ahmed stole $9 million worth of virtual money from the Solana blockchain.
The exchange Ahmed is accused of bilking was incorporated overseas and traded a variety of crypto denominations.
The DoJ claims that in July last year Ahmed used his expertise in reverse engineering smart contracts and blockchain audits to attack the exchange he worked for, inserting fake pricing data that essentially programmed the platform to give him millions of dollars in cryptocurrency fees he had not earned.
In a further alleged twist, the DoJ says he then extorted the company he was supposed to be working for, returning all but $1.5 million of the stolen assets for a pledge not to involve the authorities in the matter.
The DoJ claims Ahmed then compounded his crimes by laundering the stolen money via token-swap transactions, and through portaging it from Solana to the Ethereum blockchain in a crypto technique known as “bridging.”
He is also said to have funnelled proceeds into Monero, an anonymous cryptocurrency popular with cybercriminals because of its difficulty to trace.
He then allegedly planned to flee the US, but the DoJ said he crucially left behind him a digital trail that made it possible to track him down before he could do so.
US authorities say internet searches were traced back to Ahmed that involved key phrases such as “defi hack,” “wire fraud,” “can I cross border with crypto,” “evidence laundering,” and “buying citizenship.”
Ahmed now faces two tariffs of up to 20 years apiece for wire fraud and money laundering, both of which could stack under federal law if he is found guilty and the sentencing judge is not in a lenient mood.
He was arrested and presented before a federal court in the Southern District of New York on July 11th.
Commenting on the case, US Attorney Damian Williams said: “This is the second case we are announcing this week to shed light on fraud in the cryptocurrency and digital asset ecosystem.”
The other case Williams refers to was yesterday’s indictment of Soufiane Oulahyane, 25, believed to be a Moroccan national being held in the North African country on separate charges.
Oulahyane stands accused by US federal authorities of stealing nearly half a million dollars worth of non-fungible tokens (NFTs), including digital rights to an image from the popular Bored Ape Yacht Club series, using a bogus website that spoofed the OpenSea trading platform.
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