A former security engineer, Shakeeb Ahmed, has been sentenced to three years in prison for stealing more than $12 million from two cryptocurrency exchanges, Crema Finance and Nirvana Finance. The sentence was handed down by a federal judge, who also imposed a three-year period of supervised release.

Ahmed was charged with wire fraud and money laundering after stealing approximately $9 million from Crema Finance, a decentralized cryptocurrency exchange (DEX) built on the Solana blockchain. He used a technique that involved altering smart contracts by injecting false pricing information, which allowed him to withdraw excessive fees. The US Department of Justice stated that Ahmed executed 21 flash loans and made unauthorized profits by exploiting the DEX liquidity pool.

In addition to the Crema Finance hack, Ahmed was involved in another robbery from Nirvana Finance, which enabled him to steal over $12 million. He pleaded guilty to the charge of computer fraud and was arrested in July 2022. His trial took place in December of the same year.

Federal prosecutors initially suggested a four-year prison term, taking into account the seriousness of the crimes. However, Ahmed was given a three-year jail term and directed to forfeit $12.3 million and pay $5 million in restitution. Ahmed's attorney requested leniency, citing his voluntary disclosure of the second hack on Nirvana Finance, but the court imposed a custodial sentence to emphasize the gravity of the acts committed.

This case is significant because it is the first conviction associated with the hack of a smart contract by U.S. Attorney Damian Williams. It highlights the legal challenges and growing precedents concerning cybersecurity and fraud within the rapidly growing cryptocurrency industry. Prosecution of such cases is aimed at providing clear direction regarding the legal implications of participating in cyber theft and manipulating the technological infrastructures used in digital currencies.

Ahmed's sentencing underscores the ongoing efforts by law enforcement agencies to trace and prosecute individuals exploiting the digital finance space, regardless of the sophistication of their techniques. It serves as a warning to potential cybercriminals that they will be held accountable for their actions, even in the complex and rapidly evolving world of cryptocurrency.