Indexed Finance hacker charged in US for alleged $65m theft

US prosecutors charged 22-year-old Andean Medjedovic connected Monday successful transportation with a brace of alleged hacks totaling $65 million.

Medjedovic antecedently admitted to exploiting astir $16 cardinal from DeFi protocol Indexed Finance successful October 2021, according to tribunal papers.

He was besides believed to beryllium the hacker down the November 2023 exploit of KyberSwap, which outgo the protocol and its users astir $48 cardinal successful crypto. The hacker aboriginal sent astir $2 cardinal successful crypto to a integer wallet believed to beryllium controlled by Medjedovic.

Medjedovic is facing 5 charges, including fraud, wealth laundering, and extortion. He did not respond to aggregate requests for remark connected Monday.

A maths prodigy from Canada, Medjedovic has been connected the tally since the Indexed Finance exploit successful 2021.

But helium insists that the exploit was legal. He was simply taking vantage of a flaw successful the protocol’s design, helium said successful an online back-and-forth with victims.

That code-is-law defence precocious failed a trial successful US national tribunal erstwhile a Manhattan assemblage convicted rogue trader Avraham Eisenberg of defrauding Mango Markets, a Solana-based speech Eisenberg had exploited utilizing a method akin to Medjedovic’s.

In an interrogation with DL News successful 2023, Medjedovic said his beingness arsenic a fugitive had taken him done Europe and Latin America to an land helium declined to name.

While helium dodged questions astir the Indexed exploit, Medjedovic insisted helium had turned to ethical hacking due to the fact that it offered a “more sustainable mode of being.”

He besides repeatedly steered the speech towards his societal views, making misogynist and racist comments.

Several months later, a hacker pulled disconnected a analyzable heist that drained KyberSwap, an aggregator of decentralised exchanges, of immoderate $48 million.

DL News confirmed that a wallet connected to the Kyber exploiter sent $2 cardinal to a wallet associated with Medjedovic.

The hacker besides demanded power of Kyber successful speech for a instrumentality of immoderate of the funds.

Prosecutors allege Medjedovic was so the idiosyncratic who hacked KyberSwap. They person charged him with defrauding the aggregator and its liquidity providers and extorting its developers and members of KyberDAO.

They besides allege Medjedovic tried to launder the proceeds of the Indexed and KyberSwap exploits utilizing an unnamed crypto mixer.

In the aftermath of the Indexed Finance exploit, Medjedovic wrote different user, “I did thing precise chill but accidentally doxxed myself successful the process. I whitethorn beryllium connected the tally everlastingly now,” according to the indictment. “Need immoderate proposal astir becoming a pirate.”

The indictment besides alleges Medjedovic maintained integer documents detailing his wealth laundering plans. One specified papers included a enactment to “order a thinkpad [laptop] for storing crypto + hacks,” according to the indictment.

In the aftermath of the KyberSwap exploit, Medjedovic attempted to determination stolen crypto disconnected of a furniture 2 blockchain and onto Ethereum but was blocked by its developers, according to the indictment.

He wrote to its enactment team, demanding they let the transaction to proceed, according to the indictment; otherwise, helium would “alert authorities.”

“You privation to alert authorities … that you hacked kyber and stole idiosyncratic funds..??” idiosyncratic from the enactment squad replied.

“Yes,” Medjedovic said, according to the indictment. “Committing a transgression against idiosyncratic who whitethorn oregon whitethorn not beryllium a transgression is inactive a crime.”

Laurence Day, a co-founder of Indexed, said the imaginable apprehension of Medjedovic would person small interaction connected the victims of the 2021 exploit.

That’s due to the fact that Medjedovic stored the proceeds successful a crypto wallet that was itself hacked.

“The immense bulk of what helium stole was stolen successful turn,” Day told DL News.

“I can’t talk to however this would shingle retired successful restitution down the enactment fixed helium attacked aggregate protocols, but to my caput this is astatine slightest a closing section successful the Indexed story.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You tin interaction him astatine [email protected].