PRESS RELEASE
A five-count felony indictment was unsealed at this time in federal courtroom in New York charging a Canadian man with exploiting vulnerabilities in two decentralized finance protocols to fraudulently get hold of about $65 million from the protocols’ buyers.
Based on courtroom paperwork, from 2021 to 2023, Andean Medjedovic, 22, allegedly exploited vulnerabilities in the automated good contracts utilized by the KyberSwap and Listed Finance decentralized finance protocols. Medjedovic borrowed tons of of thousands and thousands of {dollars} in digital tokens, which he used to interact in misleading buying and selling that he knew would trigger the protocols’ good contracts to falsely calculate key variables. By way of his misleading trades, Medjedovic was capable of, and in the end did, withdraw thousands and thousands of {dollars} of investor funds from the protocols at synthetic costs, rendering the victims’ investments primarily nugatory.
Medjedovic additionally allegedly laundered the proceeds of his fraudulent schemes by a collection of transactions designed to hide the supply and possession of the funds, together with by swap transactions, “bridging transactions,” and using a digital property “mixer.” With others, Medjedovic additionally allegedly schemed to open accounts with digital property exchanges utilizing false and borrowed figuring out data to hide the supply and true possession of the proceeds. In round November 2023, after executing the KyberSwap exploit, Medjedovic additionally allegedly tried to extort the victims of the KyberSwap exploit by a sham settlement proposal, in which he demanded full management of the KyberSwap protocol and the decentralized autonomous group that oversaw the KyberSwap protocol in trade for returning 50 p.c of the digital property that he fraudulently obtained by his scheme.
Medjedovic is charged with one rely of wire fraud, one rely of unauthorized injury to a protected pc, one rely of tried Hobbs Act extortion, one rely of cash laundering conspiracy, and one rely of cash laundering. If convicted, he faces a most penalty of 10 years in jail on the unauthorized injury to a protected pc rely and 20 years in jail on every of the opposite counts. A federal district courtroom choose will decide any sentence after contemplating the U.S. Sentencing Pointers and different statutory components.
Supervisory Official Antoinette T. Bacon of the Justice Division’s Legal Division, U.S. Legal professional John J. Durham for the Jap District of New York, Chief Man Ficco of IRS Legal Investigation (IRS-CI), Particular Agent in Cost William S. Walker of Homeland Safety Investigations (HSI) New York, and Assistant Director in Cost James E. Dennehy of the FBI New York Subject Workplace made the announcement.
IRS-CI, HSI, and the FBI New York Subject Workplace are investigating the case, with helpful help supplied by U.S. Customs and Border Safety’s New York Subject Workplace and the Justice Division’s Workplace of Worldwide Affairs. The Justice Division additionally thanks the Netherlands’ Public Prosecution Service and Cybercrime Unit — the Hague of the Dutch Nationwide Police for their vital help with the investigation.
Trial Legal professional Tian Huang of the Legal Division’s Fraud Part, who’s a member of the Nationwide Cryptocurrency Enforcement Workforce (NCET), and Assistant U.S. Attorneys Nicholas Axelrod and Andrew Reich for the Jap District of New York are prosecuting the case. SEC Enforcement Legal professional Daphna A. Waxman, previously a member of the NCET, supplied vital help.
An indictment is merely an allegation. All defendants are presumed harmless till confirmed responsible past an affordable doubt in a courtroom of legislation.
