Former Amazon coder charged in $9M crypto hack

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Crypto hack overview: 

• Who: A former Amazon security engineer has been arrested and charged with wire fraud and money laundering.
• Why: Prosecutors say Shakeeb Ahmed defrauded users on the crypto exchange out of $9 million in cryptocurrency.
• Where: The crypto hack lawsuit was filed in a New York criminal court.
• ​​What are my options: Norton LifeLock carries many options when it comes to personal data security.

A former Amazon security engineer was arrested on charges he stole $9 million from a decentralized crypto exchange through a hack, laundering the stolen funds through a series of complex transfers on the blockchain. 

In a newly unsealed indictment, United States Attorney for the Southern District of New York alleges Shakeeb Ahmed, 34, used his skills as a senior security engineer to pull off a crime on the crypto exchange in July 2022.

In a statement published July 11, the U.S. attorney for the Southern District of New York, Damien Williams, said Ahmed took advantage of his expertise as a senior engineer to defraud the digital asset ecosystem and steal about $9 million in cryptocurrency.

“We also allege that he then laundered the stolen funds through a series of complex transfers on the blockchain where he swapped cryptocurrencies, hopped across different crypto blockchains, and used overseas crypto exchanges,” Williams said.  

“But none of those actions covered the defendant’s tracks or fooled law enforcement, and they certainly didn’t stop my office or our law enforcement partners from following the money.” 

Defendant allegedly inflated fees on crypto exchange

According to the indictment, Ahmed carried out an attack on the crypto exchange by exploiting a vulnerability in one of its “smart contracts” and inserting fake pricing data to fraudulently cause that contract to generate approximately $9 million dollars’ worth of inflated fees.

Ahmed was able to then withdraw those fees from the exchange in the form of cryptocurrency, prosecutors allege. 

“This conduct defrauded the Crypto Exchange and its users, whose cryptocurrency Ahmed had fraudulently obtained,” Williams says.

After he allegedly stole the fees, Ahmed had communications with the crypto exchange in which he decided to return all of the stolen funds except for $1.5 million if the exchange agreed not to refer the attack to law enforcement, the indictment states.

After the attack, Ahmed allegedly searched online for information about the attack, his own criminal liability, criminal defense attorneys with expertise in similar cases, law enforcement’s ability to successfully investigate the attack, and fleeing the United States to avoid criminal charges, prosecutors say.

Ahmed is charged with wire fraud and money laundering, each of which carry a maximum sentence of 20 years in prison. He has pleaded not guilty to the charges.

Meanwhile, Amazon has made headlines recently for lawsuits, an investigation and a $30 million settlement with the Federal Trade Commission.

What do you think of the allegations in this cryptocurrency lawsuit?

The government is represented by David R. Felton and Kevin Mead of the U.S. Attorney’s Office for the Southern District of New York.

The crypto exchange case is U.S. v. Shakeeb Ahmed, Case No. 1:23-cr-00340, in the U.S. District Court for the Southern District of New York.

Read About More Class Action Lawsuits & Class Action Settlements:

• Coinbase able to arbitrate proposed class action alleging inadequate cybersecurity measures
• Atomic Wallet knew of security flaws prior to breach, class action claims
• Binance allowed to continue operations during lawsuit as long as SEC oversees spending
• Nascar asks judge to dismiss crypto meme coin lawsuit