Security Engineer Faces 3-Year Prison Sentence After $12 Million Crypto Heist

Joseph Henry, Tech Times 12 April 2024, 07:04 pm

Shakeeb Ahmed, a cybersecurity engineer, has been sentenced to three years in prison for his involvement in stealing approximately $12 million in cryptocurrency. The sentence was announced by the U.S. Attorney for the Southern District of New York in a recent press release.

$12 Million Crypto Heist

Ahmed was convicted of hacking into two cryptocurrency exchanges and orchestrating the theft of a substantial sum of crypto. Prosecutors alleged that he carried out cyberattacks on Crema Finance and Nirvana Finance, resulting in the theft of $9 million and $3.6 million, respectively. The stolen funds from Nirvana Finance constituted nearly all of its holdings, leading to the exchange's closure.

Legal Proceedings and Plea

Following his arrest, Ahmed pleaded guilty to the charges related to both cyberattacks. He was initially described as a "senior security engineer for an international technology company," with previous employment at Amazon. However, a spokesperson told TechCrunch that he was not an employee there when he was arrested.

Unusual Deal and Consequences

After hacking Crema Finance, Ahmed attempted to return the stolen funds to the company, demanding a $1.5 million fee and assurance that the attack would not be reported to authorities. However, the crypto exchange rejected the offer, leading to Ahmed's apprehension.

While such deals, known as "white hatting," are sometimes normalized in the crypto industry, law enforcement views them differently.

In addition to his prison sentence, Ahmed has been ordered to serve three years of supervised release. He must forfeit $12.4 million, along with a significant amount of cryptocurrency, and pay restitution totaling over $5 million to the affected cryptocurrency exchanges.

Crypto hacks are rampant and as long as hackers have something to steal, the urge to commit these crimes is not going to stop.

2023 Recorded $1.8 Billion Worth of Stolen Cryptocurrency in Total

In late December, Tech Times reported that the incidents of crypto heists were rampant last year. In this year alone, hackers were able to drain $1.8 billion worth of cryptocurrency in several organizations and platforms.

This is what the investors fear about their crypto investments-the fact that their money is not safe and they are at risk of getting stolen every time.

The worst crypto hacks were associated with the Mixin platform where around $200 million was siphoned by the cybercriminals.

$1.83 billion may be big for the stolen cryptocurrency, but compared to 2022 and 2021's record, it's still smaller.

The 2022 record for stolen crypto reached $3.8 billion while in 2021, experts tallied $3.1 billion.

The trajectory of the trend suggests that the stolen crypto is going to be lower this year, but still, it's subject to change anytime. There's no assurance that it will increase or decrease because it merely depends on how tight are crypto security practices and how innovative are crypto hackers.