Canadian national accused of exploiting DeFi protocols

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U.S. prosecutors have charged Canadian citizen Andean Medjedovic with using decentralized finance (DeFi) protocols KyberSwap and Indexed Finance to steal approximately $65 million. The U.S. Department of Justice unsealed an indictment in Brooklyn Federal Court on February 3, charging Medjedovic with hacking, attempted extortion, money laundering, and wire fraud. The Brooklyn U.S. Attorney's Office said Medjedovic is currently at large.

Prosecutors allege that Medjedovic carried out deceptive transactions in October 2021 to steal approximately $16.5 million from Indexed Finance's liquidity pool. He reportedly carried out a similar attack on KyberSwap in November 2023, using it to steal approximately $48.8 million. According to the indictment, Medjedovic borrowed hundreds of millions of dollars in digital tokens to conduct deceptive transactions, causing the protocol’s smart contract to miscalculate key variables. This manipulation enabled him to withdraw millions of dollars in investor funds at artificial prices, rendering victims’ investments essentially worthless.

After allegedly exploiting KyberSwap, prosecutors claim that Medjedovic attempted to extort victims through fraudulent settlement offers. He allegedly sent a series of on-chain messages threatening to delay negotiations to return funds and demanding control of the protocol in exchange for 50% of the fraudulent digital assets. The indictment further alleges that Medjedovic conspired with a relative to launder the stolen cryptocurrency through mixers and various blockchain bridges, with the intent of cashing out on exchanges and depositing into bank accounts created with false information.

Prosecutors also note that after an unnamed bridge protocol froze some of the funds, Medjedovic allegedly paid an undercover law enforcement officer posing as a software developer approximately $85,000 to release the cryptocurrency. It is unclear who Medjedovic’s legal representation is, and he could not be reached for comment.

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