- Medjedovic allegedly stole $65M from DeFi platforms through misleading trades.
- Prosecutors believe he tried extortion and laundered stolen funds via crypto mixers.
US prosecutors charged a Canadian national, Andean Medjedovic, with allegedly exploiting DeFi protocols Indexed Finance and KyberSwap, pilfering some $65 million through fictitious trades. On Feb. 3, the Justice Department unsealed an indictment in a Brooklyn federal court against Andean Medjedovic, charging him with hacking, attempted extortion, money laundering, and wire fraud. The Brooklyn U.S. Attorney’s Office stated that Medjedovic remains at large.
Prosecutors claim Medjedovic started the assault on Indexed Finance in October 2021, siphoning $16.5 million, by manipulating liquidity pools. Prosecutors claim that he played the same trick on KyberSwap in November 2023, escaping with around $48.8 million. According to the indictment, Medjedovic made it simple for investors to enter “deceptive trades” by borrowing gigantic amounts of digital tokens, manipulating smart contracts, and transferring investor proceeds at false prices, leaving worthless shares.
Medjedovic Used Fake Accounts to Launder Stolen Funds
Following the hack of KyberSwap, Medjedovic allegedly tried to extort the protocol, seeking to take over control of the protocol for the return of half the pilfered funds. Prosecutors say he also used crypto mixers and blockchain bridges to launder the pilfered funds and sell them through exchanges and fake bank accounts.
In another twist, Medjedovic allegedly paid an undercover law enforcement official, who was masquerading as a developer, $85,000 to unfreeze crypto assets after a bridge protocol locked up some of the stolen cash.
After orchestrating the KyberSwap exploit in November 2023, Medjedovic allegedly began extorting the victims of the platform. It is reported that he offered to return 50% of pilfered assets if he could be granted total control of KyberSwap and also control of the ruling decentralized autonomous organization (DAO) of the protocol.
Medjedovic is likely to face a maximum 20-year sentence in prison on counts of wire fraud and money laundering besides the charge of attempted extortion. The case has been brought to court in cooperation between the National Cryptocurrency Enforcement Team of the Justice Department, FBI, IRS-Criminal Investigation, and Homeland Security Investigations. Besides, officials of global law enforcement from the Netherlands and others have assisted in the investigation.
Medjedovic is on the run and authorities persist in searching in tandem while the DeFi sector experiences another major security lapse.
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