PRESS RELEASE
A five-count felony indictment was unsealed immediately in federal court docket in New York charging a Canadian man with exploiting vulnerabilities in two decentralized finance protocols to fraudulently receive about $65 million from the protocols’ buyers.
In accordance with court docket paperwork, from 2021 to 2023, Andean Medjedovic, 22, allegedly exploited vulnerabilities within 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 have interaction in misleading buying and selling that he knew would trigger the protocols’ good contracts to falsely calculate key variables. By his misleading trades, Medjedovic was capable of, and finally did, withdraw thousands and thousands of {dollars} of investor funds from the protocols at synthetic costs, rendering the victims’ investments basically nugatory.
Medjedovic additionally allegedly laundered the proceeds of his fraudulent schemes by way of a sequence of transactions designed to hide the supply and possession of the funds, together with by way of swap transactions, “bridging transactions,” and the usage of a digital belongings “mixer.” With others, Medjedovic additionally allegedly schemed to open accounts with digital belongings 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 way of a sham settlement proposal, through which he demanded full management of the KyberSwap protocol and the decentralized autonomous group that oversaw the KyberSwap protocol in change for returning 50 % of the digital belongings that he fraudulently obtained by way of his scheme.
Medjedovic is charged with one depend of wire fraud, one depend of unauthorized harm to a protected laptop, one depend of tried Hobbs Act extortion, one depend of cash laundering conspiracy, and one depend of cash laundering. If convicted, he faces a most penalty of 10 years in jail on the unauthorized harm to a protected laptop depend and 20 years in jail on every of the opposite counts. A federal district court docket choose will decide any sentence after contemplating the U.S. Sentencing Pointers and different statutory elements.
Supervisory Official Antoinette T. Bacon of the Justice Division’s Prison Division, U.S. Lawyer John J. Durham for the Japanese District of New York, Chief Man Ficco of IRS Prison 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 offered 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 Lawyer Tian Huang of the Prison Division’s Fraud Part, who’s a member of the Nationwide Cryptocurrency Enforcement Group (NCET), and Assistant U.S. Attorneys Nicholas Axelrod and Andrew Reich for the Japanese District of New York are prosecuting the case. SEC Enforcement Lawyer Daphna A. Waxman, previously a member of the NCET, offered vital help.
An indictment is merely an allegation. All defendants are presumed harmless till confirmed responsible past an inexpensive doubt in a court docket of regulation.
