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Here's How 22YO 'Pirate' Allegedly Stole $65M from Crypto Platforms

C Gellidon Pirate

U.S. prosecutors charged 22-year-old Canadian Andean Medjedovic with exploiting two decentralized finance (DeFi) platforms and stealing around $65 million worth of cryptoassets.

Court documents revealed how the suspect, who referred to himself as a "pirate," allegedly exploited the Indexed Finance and KyberSwap DeFi protocols in 2021 and 2023.

According to prosecutors, around November 2023, the accused borrowed hundreds of millions of dollars in crypto and used it to engage in deceptive trading on KyberSwap, knowing it would cause the protocols’ smart contracts to falsely calculate key variables.

"Through his deceptive trades, Medjedovic was able to, and ultimately did, withdraw millions of dollars of investor funds from the protocols at artificial prices, rendering the victims’ investments essentially worthless," prosecutors said, adding that the suspect also allegedly laundered the stolen $48.4 million. It was reportedly done by swapping cryptoassets, bridging or moving them from one blockchain to another, and using so-called crypto mixers that help hide transaction histories.

Some of the exploit transactions:

exploit transactions
Source: Court documents

The KyberSwap hack was also known for public negotiations, executed via blockchain, between the platform's developers and the hacker, who demanded complete control of the KyberSwap protocol and the decentralized autonomous organization (DAO) that operated the protocol. The hacker then promised to return 50% of the stolen assets.

Prosecutors claim that Medjedovic "carefully planned the KyberSwap exploit over a period of months," including determining the optimal time to execute the exploit: "7:00 AM-8:00 AM my time means most americans are asleep and euros too."

Also, according to court documents, the Canadian had a "Post-Exploitation" plan, which included burning the evidence, booking a flight, and packing bags. Meanwhile, in the "Decisions and Mistakes" file, he allegedly wrote: "Going on the run / Yes / Chance of getting caught < Payoff for not getting caught / (NA) / Risk is typically underpriced in modern world."

Indexed Finance, according to prosecutors, was exploited using similar means in October 2021, netting the hacker $16.5 million.

Meanwhile, besides describing himself as a "pirate," Medjedovic, who holds a master’s degree in mathematics from the University of Waterloo, also said that he "may or may not be a criminal." In theory, Medjedovic could face up to 50 years in prison if he's found guilty on all counts.

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