The U.S. Justice Department has charged Canadian citizen Andean Medjedovic with stealing approximately $65 million after exploiting vulnerabilities in two decentralized finance (DeFi) protocols. These DeFi platforms, which operate on blockchain technology, offer peer-to-peer financial services without the involvement of traditional intermediaries like banks. Medjedovic allegedly took advantage of weaknesses in the smart contracts used by KyberSwap and Indexed Finance, both DeFi platforms that manage digital token liquidity pools on the Ethereum network.
The breach involved Medjedovic extracting $48.4 million from 77 KyberSwap liquidity pools and about $16.5 million from two Indexed Finance liquidity pools. According to court documents, Medjedovic’s actions included deceptive trading that manipulated the protocols’ smart contracts to miscalculate crucial variables, allowing him to withdraw millions of dollars at artificially inflated prices.
This caused massive losses for the investors, leaving their funds essentially worthless.
Following the exploitation of KyberSwap, Medjedovic allegedly attempted extortion by presenting a fake settlement proposal, offering to return half of the stolen funds in exchange for control over the KyberSwap protocol. The charges against Medjedovic include wire fraud, unauthorized damage to a protected computer, attempted extortion, conspiracy to commit money laundering, and money laundering. His scheme also involved laundering the proceeds through various crypto transactions, including using false identification and a cryptocurrency mixer to conceal the source of the stolen funds.
If found guilty, Medjedovic faces significant prison time, with a maximum of 10 years for the unauthorized damage charge and up to 20 years for each of the other charges. This case highlights the risks associated with decentralized finance platforms and the growing threat of cybercrime targeting blockchain systems. The Justice Department’s actions signal an increasing effort to combat fraud and financial crimes in the rapidly evolving world of digital assets.
