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 techniques that facilitate peer-to-peer monetary companies, eliminating the necessity for standard centralized monetary intermediaries like banks or brokerages.
These platforms ship varied monetary companies associated to digital belongings, enabling their customers to lend, make investments, earn curiosity, and commerce belongings via good contracts and decentralized purposes (dApps).
As revealed in court docket paperwork, 22-year-old Andean Medjedovic allegedly exploited vulnerabilities within the automated good contracts utilized by the KyberSwap and Listed Finance decentralized trade aggregators and operators of digital token liquidity swimming pools on the Ethereum community.
In whole, he drained roughly $48.4 million in digital tokens from 77 completely different KyberSwap Elastic liquidity swimming pools and roughly $16.5 million from two Listed Finance liquidity swimming pools (also called index swimming pools).
In November 2023, after exploiting KyberSwap, he allegedly tried to extort victims with a pretend settlement proposal, demanding management of the KyberSwap protocol and its decentralized group in trade for returning half of the stolen belongings.
“Medjedovic borrowed tons of of hundreds of thousands of {dollars} in digital tokens, which he used to have interaction in misleading buying and selling that he knew would trigger the protocols’ good contracts to falsely calculate key variables,” the U.S. DOJ stated in a Monday press launch.
“By his misleading trades, Medjedovic was in a position to, and in the end did, withdraw hundreds of thousands of {dollars} of investor funds from the protocols at synthetic costs, rendering the victims’ investments basically nugatory.”
Medjedovic can be accused of laundering proceeds from his fraudulent operations via transactions that hid the funds’ supply through the use of crypto trade 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 pc, 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 pc and as much as 20 years for every of the opposite fees.