
The U.S. Department of Justice (DOJ) has unsealed a five-count criminal indictment against a Canadian man accused of exploiting vulnerabilities in decentralized finance (DeFi) protocols to fraudulently acquire approximately $65 million in investor funds.
The indictment, filed in a federal court in New York, charges 22-year-old Andean Medjedovic with orchestrating a sophisticated scheme that manipulated automated smart contracts in the KyberSwap and Indexed Finance DeFi protocols between 2021 and 2023. According to court documents, Medjedovic allegedly borrowed hundreds of millions of dollars in digital tokens to engage in deceptive trading, leading the protocols’ smart contracts to falsely calculate key financial variables. As a result, he was able to withdraw investor funds at artificially inflated prices, rendering victims’ investments worthless.
Medjedovic’s alleged activities extended beyond smart contract manipulation. The indictment claims that he engaged in extensive money laundering efforts to obscure the origins of his fraudulent gains. “Medjedovic also allegedly laundered the proceeds of his fraudulent schemes through a series of transactions designed to conceal the source and ownership of the funds, including through swap transactions, ‘bridging transactions,’ and the use of a digital assets ‘mixer,’” the DOJ stated.
Furthermore, the indictment accuses Medjedovic of collaborating with others to open accounts on digital asset exchanges using false and borrowed identifying information to further obfuscate the origins of the illicit funds. His fraudulent efforts allegedly culminated in an extortion attempt in November 2023, following his attack on KyberSwap. In a purported “sham settlement proposal,” Medjedovic demanded full control of the KyberSwap protocol and its overseeing decentralized autonomous organization (DAO) in exchange for returning half of the stolen assets.
Medjedovic now faces multiple charges, including one count each of wire fraud, unauthorized damage to a protected computer, and attempted Hobbs Act extortion, alongside two counts of money laundering-related offenses. If convicted, he faces a maximum of 10 years in prison for the unauthorized damage charge and up to 20 years on each of the other counts.
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