- US SDNY Attorney files pioneer criminal case, $9 million worth of crypto stolen in Solana-based crypto exchange attack
- US Attorney Damian Williams has announced the first-ever criminal case involving a DEX-operated smart contract.
- Shakeeb Ahmed, the accused, leveraged his industry expertise to defraud the exchange and its users.
- The senior security engineer at an international technology company used flash loans, among other tactics, looted ≈ $9 million.
A New York district attorney has announced a pioneering criminal charge in the cryptosphere, catching the interest of market players as nostalgia for racketeering, fraud, and deceit boils over. Based on the announcement, US Attorney for the Southern District of New York (SDNY) Damian Williams has brought the first criminal charges ever involving an attack on a smart contract in the decentralized cryptocurrency exchange (DEX) sector.
Also Read: XRP holders want to write letters to Judge Torres, lawyer says no good can come from it
US Attorney announces pioneering criminal case in DeFi
The district attorney’s office for SDNY has announced the first criminal charges ever brought involving an attack on a smart contract on a decentralized cryptocurrency exchange.
U.S. Attorney Damian Williams announces the first-ever criminal case involving an attack on a smart contract operated by a decentralized cryptocurrency exchange pic.twitter.com/j3JPv2L612
— US Attorney SDNY (@SDNYnews) July 11, 2023
Citing the indictment in the July 11 announcement, Williams said that Shakeeb Ahmed, the accused, leveraged his expertise as a senior security engineer at an international technology company "to defraud the exchange and its users." His loot aggregated to approximately $9 million in crypto, but he gave back most of it, save for $1.5 million on condition that the firm did not bring the case to law enforcement.
[Ahmed exploited] a vulnerability in one of the crypto exchange's smart contracts and inserted fake pricing data to fraudulently cause that smart contract to generate approximately $9 million' worth of inflated fees.
The case, prosecuted by a joint task force comprising the Money Laundering and Transnational Criminal Enterprises Unit and Complex Frauds and Cybercrime Unit, alleges that Ahmed laundered the loot through a series of complex transfers on the blockchain.
Like many reports, the accused swapped the stolen cryptocurrencies by bridging between Solana (SOL) and Ethereum (ETH) blockchains through cryptocurrency exchanges both within and outside the country to get away unscathed.
Nevertheless, thanks to the blockchain's unique ability to track movements, Ahmed left a trail that law enforcement capitalized on to track the culprit. A joint task force comprising the authorities and the office of the US Attorney has followed the money.
It remains unclear which DEX was affected in particular, but CoinDesk speculates it could be Crema Finance. This is likely, considering the press release cites a platform on the Solana blockchain.
1) It's been a tough day. Here we would like to give a recap of the recent hacking we just suffered from and share the information that we have in hands with all our users and Solana audience with transparency.
— CremaFinance (@Crema_Finance) July 3, 2022
According to Williams, the SDNY is keen to clamp down on bad actors trying to leverage "new technologies to commit old-fashioned frauds." Reassuring that commitment, the authority demonstrates a zero-tolerance for fraud against crypto and traditional finance.
The announcement underscores the onerous concern surrounding bad actors in the market, with IRS-CI Special Agent in Charge Tyler Hatcher acknowledging "financial crime strikes at the core of our national and economic banking security. Therefore, the unsealing of this case is a tactical move by the authorities to restore consumer confidence in the country's financial system.
Investors jolted with memories of previous crypto losses
The development is a watershed moment in crypto because it marks the first-ever criminal case involving an attack on a smart contract operated by a decentralized cryptocurrency exchange. Accordingly, market players reminisce losses made in crypto, with one particular case, the FTX saga, coming up.
Thats good. Send the frauds to jail. Especially, SBF.
— mrwagmi.btc (@mrwagmibtc) July 11, 2023
Nevertheless, the development demonstrates a clear intention by the SDNY to protect smart contracts from bad actors. Pro-XRP Attorney John E Deaton has commended the development.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks

Crypto trading volume declines further, signaling waning trader enthusiasm and market momentum
The total crypto market capitalization lost $1.01 trillion since January, while Santiment data shows that crypto-wide trading volume has dropped since February’s peak. For a healthier and more sustainable recovery, bulls look for rising prices accompanied by increasing volumes; until trading activity picks up, cautious market sentiment is likely to prevail.

BNB price tops $570 as Binance receives $2 billion investment from Dubai
BNB price rose as high as $574 on Thursday as markets reacted to news that Binance received major investments from an Abu Dhabi based firm. Derivative markets analysis shows how BNB traders are repositioning amid the latest swings in market sentiment.

PEPE price outperforming DOGE and SHIB as US CPI boosts Crypto markets
PEPE price crossed the $0.00007 for the first time this week as markets reacted to positive macro market signals. Early insights show crypto traders are displaying high risk appetite at the onset of the current market rally. Could this sustain PEPE price uptrend along with the rest of the memecoin market.

XRP records slight gains as Ripple's battle with SEC nears end
Ripple's XRP recorded a 2% gain on Wednesday following rumors of the company nearing an agreement with the Securities & Exchange Commission (SEC) to end their four-year legal battle.

Bitcoin: Will Trump's Strategic Bitcoin Reserve and White House Crypto Summit support BTC recovery?
Bitcoin price extends its decline on Friday, falling over 5% so far this week. BTC uncertainty and volatility spikes liquidated $1.67 billion as the first-ever White House Crypto Summit takes place on Friday.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.