Nirvana Finance hacker admits guilt and agrees to return $12.3m

Senior security engineer Shakib Ahmed admitted to hacking the Nirvana Finance protocol and another unnamed decentralized exchange (DEX).

According to the statement, Ahmed agreed to return $12.3 million obtained as a result of the exploit and pay compensation in the amount of $5.07 million. The U.S. Attorney’s Office says in the summer of 2022, Ahmed took advantage of a vulnerability in the smart contract of an unnamed Solana-based exchange to steal funds.

A few weeks later, the hacker carried out another attack on another Nirvana Finance project. Protocol officials offered him a $500,000 reward for returning the funds, but the parties never reached an agreement.

The Southern District of New York court found Shakib Ahmed guilty of hacking smart contracts and stealing assets. U.S. Attorney Damian Williams said Shakib Ahmed’s case is the first-ever conviction for such a hack:

“My Office announced the first-ever arrest involving an attack on a smart contract. Today, senior security engineer Shakeeb Ahmed pled guilty and agreed to return all of the stolen crypto to his victims.”

Damian Williams, U.S. Attorney

Ahmed faces a maximum sentence of five years in prison. The final verdict in the case will be delivered on Mar. 13, 2024.

Fraud in the cryptocurrency industry is becoming increasingly visible to U.S. authorities. According to the Internal Revenue Service, 4 of the 10 most significant crypto crimes this year were related to cryptocurrency.

U.S. regulators began to attack the largest players in the crypto market after November 2022, when the FTX cryptocurrency exchange went bankrupt. Since the beginning of the year, U.S. regulators, most notably the Securities and Exchange Commission, have filed several lawsuits against some of the leading crypto market players or issuers of their assets. At the same time, banks providing accounts and payment processing services for cryptocurrency platforms were also attacked.