Security engineer sentenced to 3 years in prison for $12 million cryptocurrency hack

Image credits: Bryce Durbin/TechCrunch

Shakib Ahmed, a cybersecurity engineer convicted of stealing approximately $12 million in cryptocurrency, was sentenced Friday to three years in prison.

The U.S. Attorney for the Southern District of New York announced the ruling in a press release. According to prosecutors, Ahmed is accused of hacking two cryptocurrency exchanges and stealing approximately $12 million in cryptocurrencies.

Attorneys representing Ahmed, Adam Schwartz and Bradley Bondi, did not respond to requests for comment.

When Mr. Ahmed was arrested last year, authorities described him as a “senior security engineer at an international technology company.” His Linkedin profile states that he previously worked at Amazon. However, an Amazon spokesperson told TechCrunch that he was not working there at the time of his arrest.

Although the name of one of the victims has not been disclosed, Ahmed reportedly hacked Solana-based cryptocurrency exchange Crema Finance in early July 2022.

And a few weeks later, he hacked Nirvana Finance. With these two hacks of his, Ahmed stole $9 million and he stole $3.6 million, respectively. In Nirvana Finance's case, the stolen funds “represented nearly all of the funds owned by Nirvana,” prompting Nirvana Finance to shut down, according to a press release.

Mr. Ahmed pleaded guilty to carrying out both cyberattacks.

After hacking Crema, Ahmed contacted the company in an attempt to return the stolen funds, but with the exception of a $1.5 million fee (a type of unofficial finder's fee) and a promise that Crema would not report the attack to authorities. was there. Crema refused, and Ahmed was eventually arrested.

These types of transactions are unusual in the world of cybersecurity, but commonplace in the world of cryptocurrencies. These transactions are often referred to as “white hatting,” even though they involve hacking the target and stealing the victim's funds without their consent, and are more similar to what “black hat” hackers typically do. Masu. Mr. Ahmed's case shows that while the crypto industry accepts that these types of transactions are sometimes a cost of doing business, law enforcement does not view it the same way.

In addition to three years in prison, Mr. Ahmed was sentenced to three years of supervised release, and he will “forfeit $12.4 million in virtual currency and pay more than $5 million in restitution to the cryptocurrency exchange and Nirvana.” It is said that he was ordered to do so. Go to the prosecutor's press release.