Man Indicted for Crypto Fraud Involving Millions in Digital Tokens

• The accused exploited DeFi platforms, stealing $48.8M through smart contract manipulation and laundering funds via mixers and false accounts.
• A detailed playbook, “moneyMovementSystem,” was used to obscure stolen funds, including bridging and fraudulent KYC tactics.
• Global authorities are increasing efforts, with the DOJ seeking $16M in seized crypto and Delhi Police arresting a suspect in a $235M hack.

A man has been indicted for orchestrating fraudulent activities involving hundreds of millions of dollars in digital assets. According to court filings, the individual manipulated automated smart contracts, causing them to miscalculate critical financial parameters through deceptive trading tactics. These actions reportedly enabled the theft of significant amounts of digital tokens across multiple platforms.

Exploits and Laundering Strategies

The indictment outlines how the accused leveraged swap transactions to exchange stolen digital tokens for other cryptocurrencies. Bridging transactions were conducted to transfer funds across various blockchain networks, and digital asset mixers were used to obscure transaction trails. The suspect, Medjedovic, and his associates allegedly opened accounts at multiple cryptocurrency exchanges using falsified or borrowed identities to conceal their activities.

Following the Indexed Finance hack, prosecutors allege Medjedovic collaborated with an accomplice to launder stolen funds through exchange accounts created with fraudulent KYC information. Additionally, a detailed “moneyMovementSystem” playbook was maintained by the accused to document methods of obfuscating illicit transactions.

Attempt to Bypass Restrictions

Medjedovic reportedly encountered obstacles when a bridge protocol froze some of his transactions. To circumvent these restrictions, he allegedly paid $80,000 to an undercover law enforcement agent, who was posing as a software developer, to unlock $500,000 in frozen cryptocurrency.

In November 2023, Medjedovic allegedly targeted KyberSwap, a DeFi protocol operating on Ethereum and other blockchains. By exploiting a vulnerability in the protocol’s liquidity pools, he drained $48.8 million in assets from 77 pools. Post-exploit, Medjedovic attempted to extort KyberSwap developers and stakeholders through a fraudulent settlement proposal.
This indictment emerges amidst increased law enforcement efforts to address cyber-enabled financial crimes globally. In an unrelated case, Delhi Police arrested a man connected to a $235 million cyberattack on India’s WazirX crypto exchange. Meanwhile, the U.S. Department of Justice has initiated proceedings to seize $16 million in FTX-linked crypto, further complicating asset recovery efforts.