Authorities in the United States recently revealed that law enforcement has arrested Shakeeb Ahmed for “wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange.” The U.S. Attorney for the Southern District of New York suggested that the money laundering charges against the security engineer stem from his alleged attempts to obfuscate the movement of the stolen funds.
Money Laundering Charges
The United States Department of Justice (DOJ) announced on July 11 that Shakeeb Ahmed, a former senior security engineer at a tech firm, had been arrested for “wire fraud and money laundering in connection with his attack on a decentralized cryptocurrency exchange.” According to U.S. Attorney for the Southern District of New York Damian Williams, Ahmed stole approximately $9 million in cryptocurrency from the decentralized crypto exchange.
As explained in the DOJ’s statement, the former security engineer’s arrest followed the unsealing of an indictment charging Ahmed for his role in the cyber theft. Meanwhile, the U.S. attorney also revealed that the money laundering charges against the security engineer stem from his alleged attempts to obfuscate the movement of the stolen funds.
“We also allege that he then laundered the stolen funds through a series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges. But none of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my Office or our law enforcement partners from following the money,” Williams said.
DOJ and IRS Tracking Fraudsters Everywhere
For his part, Homeland Security Investigations (HSI) special agent in charge, Chad Plantz, highlighted the role played by Ahmed’s indictment and arrest in preserving “consumer confidence in our financial system.” Tyler Hatcher, a special agent at the Internal Revenue Service (IRS), said his organization along with the DOJ will continue to be at the “forefront of cyber investigations and will track these fraudsters anywhere they try to hide and hold them accountable.”
According to the DOJ, Ahmed is said to have executed the attack by “exploiting a vulnerability in one of the Crypto Exchange’s smart contracts.” Exploiting the vulnerability allegedly allowed the former security engineer to generate “approximately $9 million worth of inflated fees that Ahmed did not legitimately earn.”
Shortly after siphoning the millions of dollars, Ahmed is alleged to have agreed to return most of the stolen funds if the crypto exchange refrained from referring the matter to law enforcement. Besides using the privacy coin Monero to hide his tracks, the 34-year-old engineer is said to have resorted to using overseas crypto exchanges.
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