A 22-year-old Canadian citizen has been indicted for making use of certain vulnerabilities in two decentralized finance (DeFi) protocols in a DeFi fraud scheme, fraudulently collect around $65 million from investors, including individuals in the United States. The indictment alleges that 22-year-old Andean Medjedovic manipulated the smart contracts of decentralized exchange (DEX) aggregators KyberSwap and Indexed Finance between 2021 and 2023, obtaining the funds of investors at artificial prices and rendering their investments worthless. Andean Medjedovic will be facing multiple charges from the United States Department of Justice for committing wire fraud, computer hacking, attempted extortion, and money laundering.
More Information About the Alleged Hack
Andean Medjedovic is indicted of manipulating trading activities, resulting in glitches in smart contracts. These fraudulent activities have allowed him to gather huge amounts of money. After stealing the cryptocurrency via bridge protocols and cryptocurrency mixers, Medjedovic has attempted to launder the stolen cryptocurrencies.
KyberSwap and Indexed Finance
Andean Medjedovic has manipulated the smart contracts of two decentralized exchange aggregators, KyberSwap and Indexed Finance.
The KyberSwap incident happened on 22 November 2023, when Medjedovic reportedly targeted the Elastic Pools liquidity solution. KyberSwap responded to the hack by offering a 10% bounty, which resulted in the recovery of $4.7 million. The hacker, however, increased the level of demands, requesting total control over the business running KyberSwap, access to KyberDAO, the platform’s governance mechanism, and comprehensive company data, including financial and structural information.
After Index Finance’s liquidity pool was attacked in October 2021 and again in 2023, the protocol’s founders plan to use the remaining treasury assets to compensate the victims of the 2021 exploits, which were part of Medjedovic’s earlier Defi fraud scheme.
Previous Cases on Andean Medjedovic
It is ironic that Medjedovic, who is currently 22 years old, has been wanted by Canadian authorities since he was 18 years old for the $16 million DeFi extortion scheme on Indexed Finance.
According to CoinDesk at the time, the master’s degree recipient, gifted coder, and teenage arithmetic prodigy ‘allegedly utilized flash loans’ to siphon off $16 million from Indexed as part of that plan. Flash loans are exclusive to DeFi platforms and do not demand collateral from the borrower. The name of Medjedovic, his previous residence in Waterloo, Ontario, and his life on the run were also made public by the cybersecurity specialists looking into the attack.
The funnier part is that Medjedovic, at one point, has communicated with the Canadian authority and said he would be showing up for a virtual hearing regarding the theft. The Canadian authorities had persuaded Medjedovic to return the stolen cryptocurrencies. However, Medjedovic has never shown up to court. Instead, he stated that he was legally entitled to the money because the ‘code is law’ defense.
Impact and Legal Actions
The indictment reveals advanced hacking methods used in the DeFi fraud scheme, suggesting a serious breach in what is often regarded as a safe business environment. Given that he was charged with several crimes, a conviction for all of them may result in a maximum sentence of 90 years in jail. To sum up, this case highlights the increasing weaknesses in DeFi platforms and the necessity of strong security measures to fend off such complex attacks.