- Crypto fraud is under scrutiny as U.S. prosecutors charge a Canadian national for exploiting DeFi flaws, allegedly stealing $65 million.
- The accused used deceptive transactions and advanced laundering methods to hide stolen funds, moving them across multiple networks.
- Facing charges of fraud, hacking, and extortion, the suspect remains at large as authorities conduct an international search for his arrest.
Crypto fraud is not new and was back in the spotlight recently after the US prosecutors accused a Canadian citizen of two major decentralized finance attacks. The accused is suspected to have exploited system bugs to embezzle more than $65 million in cryptocurrencies. Andean Medjedovic, a mathematics graduate of the University of waterloo, US federal authorities found him guilty. He is charged with crypto fraud, hacking, extortion, money laundering and these charges stem from his alleged involvement in two different platforms.
Prosecutors also claimed that Medjedovic focused on some vulnerabilities that he found in KyberSwap and Indexed Finance protocols by performing manipulative transactions and taking part in automated calculations. He defrauded large amounts by use of digital agreements, thus making it look like normal trading.
Crypto Investors Lose Millions
In 2023, Medjedovic siphoned $48.8m from KyberSwap and in 2021, he stole $16.5M from Indexed Finance from the notes section of the platform. Consequently, many investors drowned; they were left with their assets transforming to be valueless.
Police officials state that Medjedovic staged his attack very carefully and has files labelled in_detail_ with hostile names and lists of possible victims. He even synchronized his operations to avoid getting caught at the most inconvenient time especially when other countries were trading since the British stock exchange was closed during the night.
He is further said to have tried to extort one of the platforms by seeking to gain operational control over it. As a condition, he agreed to refund half of the stolen money back to the bank. They were dismissed on those demands as investigative activities escalated.
Undercover Crypto Sting Operation
He also employed skills that would ensure that it would be hard to track the movement of the stolen items. He used money transferral through computers to disguise his transactions on several networks, created accounts using fake accounts to gain access to an accounts.
He pulled a particular transaction that was prohibited for some time and tried to do it with the help of a contact who could unblock it. Despite paying $85,000 to unfreeze $ 500,000 the man found out that the person to whom he was paying money was an escort involved in sting operation with the police.
The legal implication of the case is that if convicted Medjedovic is liable to jail for decades, with each of the charges of fraud, extortion, and money laundering attracting up to 20 years imprisonment. Specifically, the following additional penalties may also arise where a person gains unauthorized access to protected financial systems:
The search for him goes on even to date, and several entities have been involved in an international operation. However, one of the above mentioned platform has come up with a compensation program perhaps considered by over a thousand victims. This case remains rather disturbing and it is a foreshadowing of the increasing danger that is looming in the future of digital finance and cyber warfare.