Guilty Plea in First-Ever Smart Contract Fraud Conviction of $12M Solana DeFi Hacks

By: Eva Baxter

Shakeeb Ahmed, a software engineer, has pleaded guilty to two hacks of Solana DeFi applications, marking the first conviction for smart contract fraud, as confirmed by the United States Attorney for the Southern District of New York, Damian Williams. Ahmed exploited two DeFi apps resulting in over $12 million in stolen funds. Attempting to camouflage his illicit activities, Ahmed used a series of techniques including swapping his gains for Monero (XMR), transacting on international crypto exchanges, moving funds through crypto mixers such as Samourai Whirlpool, and transferring funds to the Ethereum blockchain.

The first attack happened on July 2, 2022, where Ahmed targeted an unidentified decentralized exchange and generated $9 million via inflated fees. He then executed a second attack on Nirvana Finance, a Solana-based DeFi platform, on July 28, 2022, and gained $3.6 million from the market manipulation of ANA tokens.

Ahmed has agreed to pay restitution of $5 million, and the final sentence will be determined in March 2024. Authorities have highlighted that this case not only signifies the gravity and repercussions of complex cybercrimes but also demonstrates effective law enforcement in the digital currency realm.