Ex-security engineer gets three years for first-ever smart contract hacking conviction, stole $12 million in crypto

Former security engineer Shakeeb Ahmed was sentenced to three years in prison on Friday after prosecutors said he hacked two decentralized crypto exchanges — stealing over $12 million worth of crypto in the process. 

The case involved the first-ever conviction for hacking a smart contract, said U.S. Attorney for the Southern District of New York Damian Williams in a statement on Friday. Ahmed had previously pleaded guilty to hacking the exchanges. 

"No matter how novel or sophisticated the hack, this Office and our law enforcement partners are committed to following the money and bringing hackers to justice," Williams said. "And as today’s sentence shows, time in prison — and forfeiture of all the stolen crypto — is the inevitable consequence of such destructive hacks.”  

Ahmed, 34, was charged in July with wire fraud and money laundering. Prosecutors said he executed an attack on a decentralized crypto exchange and used phony pricing data to generate $9 million worth of fees, then withdrew the fees in crypto. A few weeks later, Ahmed conducted a second attack on the decentralized crypto exchange Nirvana Finance. Prosecutors said he later laundered the millions he stole, in part using crypto mixers to hide ownership.

Ahmed was also ordered on Friday to forfeit about $12.3 million and a "significant quantity of cryptocurrency" and pay $5 million in restitution to the unnamed crypto exchange and Nirvana, according to the Justice Department's statement. 

In court

Prosecutors had asked for Ahmed to get four years in prison, according to court documents. 

Ahmed told the court on Friday that he had lost his way.

"I lost my way. I apologize to the users of Nirvana Finance," Ahmed said, according to reporting from Inner City Press . "(Sobs) I am raised in a harsh and unforgiving household. I was drawn to technology. I got lost. During the pandemic I turned to crypto."