What's the story?
Shakib Ahmed, an experienced cybersecurity expert, was sentenced to three years in prison for stealing an estimated $12 million worth of digital currency.
The U.S. Attorney for the Southern District of New York announced the verdict via press release on Friday.
According to prosecutors, Ahmed was reportedly detained last year after breaching the security of two cryptocurrency exchanges.
Mr. Ahmed's professional background and victims
At the time of his arrest, authorities described Mr. Ahmed as a “senior security engineer at an international technology company.”
His LinkedIn profile indicates he previously worked for Amazon, but an Amazon representative confirmed: tech crunch He was not employed there at the time of his arrest, police said.
The victims of Ahmed's hacking exploits were two cryptocurrency exchanges, Crema Finance and Nirvana Finance, from which he stole $9 million and $3.6 million, respectively.
Aftermath of cryptocurrency heist
Ahmed admitted to both cyberattacks. He hacked Solana-based cryptocurrency exchange Crema Finance in early July 2022.
A few weeks later, he hacked Nirvana Finance, resulting in the loss of nearly all of its assets and the company's closure.
After breaking into Crema Finance, he sought to return the stolen funds, minus a $1.5 million fee, on the condition that Crema not report the incident.
However, Mr. Crema rejected this proposal, and Mr. Ahmed was subsequently arrested.
Ahmed's case shines a light on 'white hating'
Ahmed's case highlights a practice known as “whitehatting” in the cryptocurrency industry.
This includes illegally hacking or stealing victims' funds without their consent, and is often considered an operational cost in this field.
However, law enforcement agencies do not share this perspective.
The practice has come under scrutiny after Mr Ahmed was found guilty of misconduct.
Additional penalties and compensation order for Mr. Ahmed
In addition to his prison sentence, Mr. Ahmed also received three years of supervised release. He was ordered to forfeit $12.4 million and a large amount of virtual currency.
Additionally, he is obligated to pay more than $5 million in damages to the crypto exchange and Nirvana Finance.
These penalties were imposed following his confession and subsequent sentencing for cryptocurrency theft.