Canadian Arrested for Stealing $65M in Crypto from DeFi Protocols

Canadian Andean Medjedovic arrested for stealing $65M in crypto from DeFi protocols KyberSwap and Indexed Finance.

Andean Medjedovic, a Canadian national, has been charged with wire fraud, computer hacking, attempted extortion, and money laundering following his alleged theft of $65 million in cryptocurrency. Two blockchain-based decentralized finance protocols named KyberSwap and Indexed Finance suffered from the theft which took place on their systems.

These platforms allow users to exchange cryptocurrencies through automated market makers and liquidity pools. The authorities accuse Medjedovic of locating security weaknesses in smart contracts maintained by these protocols to carry out his theft of millions worth of investor money. He is currently at large.

The unsealed indictment emerged today before a federal court based in Brooklyn New York. The court documents explain that Medjedovic manipulated both the KyberSwap and Indexed Finance systems to empty their funds. The liquidity pools within KyberSwap enabled users to trade tokens by providing cryptocurrencies as contributions.

Medjedovic took advantage of coding inadequacies in smart contracts that scheduled these pools to manipulate prices for securing millions of dollars as illegal earnings from investors. The stolen funds amounting to $48.8 million stemmed from 77 KyberSwap liquidity pools distributed across six blockchains as per reports.

Medjedovic Laundered Stolen Money with Fake Accounts

U.S. Attorney Durham explained that Medjedovic used an intricate method to take advantage of two DeFi protocols’ software vulnerabilities thus harming their investors. The IRS and the FBI together with other federal agencies searched for Medjedovic while they carried out their investigation. IRS Special Agent Chavis described the substantial losses attributed to Medjedovic while explaining that different organization resources helped locate him.

After obtaining the stolen cryptocurrency, Medjedovic made extortion demands to KyberSwap developers and members of its decentralized community by attempting to gain control of their protocol. Medjedovic stated to the developers that he would return stolen money if he got what he asked for.

To disguise the stolen money, Medjedovic employed bridge protocols for blockchain transfers in addition to mixers for concealing transaction origins. The freezing of his transactions on the protocol caused Medjedovic to offer the undercover agent $80,000 to recover his trapped funds.

Medjedovic also targeted Indexed Finance in 2021. Through price manipulation tactics on the platform, he committed theft worth $16.5 million. The suspect attempted to clean the stolen money through use of fake user accounts combined with cryptocurrency transaction platforms.

The criminal allegations against Medjedovic remain accusations while he stands as innocent until a conviction is established. Medjedovic’s situation demonstrates how cybercriminal activities can threaten users within the expanding cryptocurrency market.