A Canadian named Andean Medjedovic has been arrested for allegedly swiping $65 million from DeFi protocols, specifically KyberSwap and Indexed Finance.
The Canadian job
Medjedovic is facing some serious charges, including wire fraud, computer hacking, attempted extortion, and money laundering, as the authorities claim he exploited security flaws in the smart contracts of these platforms to pilfer millions from unsuspecting investors. And guess what? He’s currently on the run!
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The indictment was unsealed in a Brooklyn federal court, revealing how Medjedovic manipulated the systems of KyberSwap and Indexed Finance to drain their funds.
These platforms allow users to swap cryptocurrencies using automated market makers and liquidity pools, and Medjedovic allegedly took advantage of coding weaknesses to inflate prices and pocket millions illegally.
When code is not law
According to reports, about $48.8 million of the stolen loot came from 77 liquidity pools across six different blockchains. U.S. Attorney Durham stated that Medjedovic used a crafty approach to exploit vulnerabilities in these DeFi protocols, leaving investors high and dry.
The IRS and FBI are hot on his trail, working together with other federal agencies to track him down.
IRS Special Agent Chavis highlighted the massive losses linked to Medjedovic’s actions and how various resources were mobilized to locate him.
After snagging the crypto, Medjedovic tried to extort KyberSwap developers by demanding a ransom for the return of their stolen funds. He even offered to give back the money if they met his demands.
How to cover the traces
To cover his tracks, he used bridge protocols for blockchain transfers and mixers to hide where the money came from, and when some of his transactions got frozen, he even tried to bribe an undercover agent with $80,000 to get his hands back on his trapped cash.
Medjedovic also targeted Indexed Finance back in 2021, pulling off a theft worth $16.5 million by manipulating prices on their platform.
He attempted to clean his dirty money using fake accounts and various cryptocurrency transaction platforms.
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