Posted on: February 04, 2025 08:00 PM

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Canadian national charged with stealing approximately USD 65 million in cryptocurrency from two DeFi protocols

An indictment was unsealed today in federal court in Brooklyn charging Andean Medjedovic with wire fraud, computer hacking and attempted extortion for stealing approximately $65 million in cryptocurrency from the KyberSwap and Indexed Finance decentralized finance (DeFi) protocols, which are sophisticated financial platforms residing on cryptocurrency blockchains.  Medjedovic is also charged with laundering the proceeds of the theft.  He is currently at large.

 

John J. Durham, United States Attorney for the Eastern District of New York; Antoinette Bacon, Supervisory Official of the Justice Department’s Criminal Division; Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI); James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and William S. Walker, Special Agent in Charge, Homeland Security Investigations New York (HSI) announced the indictment.

“As alleged, the defendant executed a highly sophisticated scheme to exploit two decentralized finance protocols and steal tens of millions of dollars’ worth of cryptocurrency from investors,” stated United States Attorney Durham.  “My Office remains at the forefront in prosecuting cutting-edge cases involving new and emerging technologies, demonstrating our commitment to protecting all financial markets, including the digital assets markets.  Criminals like the defendant who take advantage of new technologies to harm investors will be held accountable no matter where in the world they carry out their schemes.”  

Mr. Durham expressed his appreciation to the United States Securities and Exchange Commission’s Crypto Assets and Cyber Unit for their valuable assistance during the investigation.

“This was a sophisticated fraud that exploited vulnerabilities in ‘smart contracts’, resulting in the theft of millions of dollars in cryptocurrency,” stated IRS-CI New York Special Agent in Charge Chavis.  “It’s alleged that Medjedovic executed a hack that stole nearly $65 million in crypto between two schemes, leaving liquidity pool investors in the red.  In investigating this case, IRS-CI New York’s Cyber group worked closely with its federal partners while leveraging resources from IRS-CI’s Cyber Attaché at Europol and the J5 Cyber Group. Even with the complexities of DeFi, we tracked down who is responsible for this large-scale theft, and he is now a wanted man.”

“Hackers can at times be painted in a flattering light by pop culture, some admiring their skills and acumen. They're stealing money that isn't theirs, and they're breaking the laws of this country. We allege Andean Medjedovic violated several of those laws, and he, along with all the other cyber criminals who believe they're untouchable, will face justice,” stated FBI Assistant Director in Charge Dennehy.

“These charges are a result of HSI New York’s determination to disrupt Andean Medjedovic’s alleged sophisticated far-reaching transnational cybercrime and seek justice for the millions of dollars syphoned from financial platforms,” stated HSI New York Special Agent in Charge Walker.  “Our global reach, experience and extensive knowledge of the cyber domain allow us to rapidly develop investigations into bad actors who seek to exploit the cryptocurrency market. Our federal partnerships across the globe made this investigation a success to include support from the HSI attaché offices in the Netherlands.”

KyberSwap and Indexed Finance were developers of automated market-making services called “liquidity pools” that allowed users to swap cryptocurrency tokens with each other.  The liquidity pools were managed by computer code called “smart contracts” and relied on investor contributions of cryptocurrency.  As alleged, Medjedovic used manipulative trading to exploit vulnerabilities in the KyberSwap and Indexed Finance smart contracts. These manipulative trades enabled Medjedovic to drain approximately $65 million in cryptocurrency that belonged to investors from the KyberSwap and Indexed Finance liquidity pools.

From DOJ