The U.S. Justice Division has charged a Canadian man with stealing roughly $65 million after exploiting two decentralized finance (DeFI) protocols.
DeFI platforms are blockchain-based methods that facilitate peer-to-peer monetary companies, eliminating the necessity for typical centralized monetary intermediaries like banks or brokerages.
These platforms ship numerous monetary companies associated to digital belongings, enabling their customers to lend, make investments, earn curiosity, and commerce belongings by way of sensible contracts and decentralized purposes (dApps).
As revealed in court docket paperwork, 22-year-old Andean Medjedovic allegedly exploited vulnerabilities within the automated sensible contracts utilized by the KyberSwap and Listed Finance decentralized alternate aggregators and operators of digital token liquidity swimming pools on the Ethereum community.
In complete, he drained roughly $48.4 million in digital tokens from 77 totally different KyberSwap Elastic liquidity swimming pools and roughly $16.5 million from two Listed Finance liquidity swimming pools (also referred to as index swimming pools).
In November 2023, after exploiting KyberSwap, he allegedly tried to extort victims with a faux settlement proposal, demanding management of the KyberSwap protocol and its decentralized group in alternate for returning half of the stolen belongings.
“Medjedovic borrowed hundreds of millions of dollars in digital tokens, which he used to engage in deceptive trading that he knew would cause the protocols’ smart contracts to falsely calculate key variables,” the U.S. DOJ stated in a Monday press launch.
“Through his deceptive trades, Medjedovic was able to, and ultimately did, withdraw millions of dollars of investor funds from the protocols at artificial prices, rendering the victims’ investments essentially worthless.”
Medjedovic can also be accused of laundering proceeds from his fraudulent operations by way of transactions that hid the funds’ supply through the use of crypto alternate accounts opened utilizing false identification, a cryptocurrency mixer, and swap and bridging transactions.
He’s charged with one depend of wire fraud, one depend of unauthorized harm to a protected laptop, one depend of tried Hobbs Act extortion, one depend of conspiracy to commit cash laundering, and one depend of cash laundering.
If discovered responsible, Medjedovic may face a most sentence of 10 years for unauthorized harm to a protected laptop and as much as 20 years for every of the opposite costs.
