The United States Department of Justice (DoJ) has brought on the first criminal charges against Shakeeb Ahmed for an attack on an unnamed smart contract-controlled Decentralized Exchange (DEX) platform.
DoJ and the DeFi Fraud Crackdown
According to Damian Williams, the U.S. attorney for the Southern District of New York, Shakeeb, a former security engineer for an international tech company, defrauded the DEX platform about $9 million in cryptocurrency. The 34-year-old was also indicted of wire fraud as he attempted to launder the funds through complex transfers on different blockchains at home and abroad.
Despite his extensive money laundering strategy, Shakeeb was unable to cover his tracks completely as the enforcement team duly tracked the funds that eventually resulted in his arrest.
“Shakeeb Ahmed, who was a senior security engineer at an international technology company, used his expertise to defraud the exchange and its users and steal approximately $9 million in cryptocurrency,” Damian Willians said in a statement.
“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.”
The DOJ is known to be very proactive in fishing out scams in the digital currency ecosystem and while its earlier enforcement actions have been focused on mainstream trading exchanges and general crypto platforms, the Shakeeb charges are a testament that its monitoring prowess has a wide acclaim in the Web3.0 ecosystem.
As revealed, the two wire fraud and money laundering charges carry a maximum sentence of 20 years each.
Experts Commend Blockchain’s Transparency
The announcement of the crackdown on smart contract-linked fraud has generated a talking point in the crypto ecosystem.
XRP holder’s lawyer and crypto attorney John Deaton noted that public blockchains remain a better alternative for catching criminals when compared to cash. In his words, “Cash remains the criminal’s best option.”
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