On February 3, the U.S. Department of Justice publicly filed an indictment in Brooklyn Federal Court, accusing Canadian Andean Medjedovic of attacking the Indexed Finance liquidity pool in October 2021, stealing $16.5 million through 'false transactions'; in November 2023, he attacked KyberSwap using the same method, stealing $48.8 million, with a total amount involved reaching $65 million. The charges include hacking, money laundering, wire fraud, and extortion, with Medjedovic currently still at large.
Control of False Transactions and Extortion Agreements
The prosecution pointed out that Medjedovic borrowed hundreds of millions of dollars in tokens for 'false transactions,' manipulating key parameters of the agreement's smart contract calculations, resulting in investor funds being drained by artificially manipulated prices, causing asset values to drop to zero. After attacking KyberSwap, he further threatened to delay negotiations for fund returns through on-chain messages, demanding control of the agreement in exchange for returning 50% of the illicit gains, which the prosecution termed as a 'false settlement proposal.'
Money Laundering with a Mixer and $85,000 Bribe to Undercover Law Enforcement
The indictment revealed that Medjedovic collaborated with relatives to transfer illicit funds using a crypto mixer and cross-chain bridge, attempting to cash out through exchange accounts and bank accounts created with fake information. After some funds were frozen by an unnamed cross-chain bridge, Medjedovic paid $85,000 to an undercover law enforcement officer disguised as a software developer, trying to unlock the crypto assets, which became key evidence for conviction.
DeFi Security Controversies Renew Regulatory Attention
This case highlights the vulnerabilities of DeFi protocol smart contracts and money laundering risks. The U.S. Department of Justice emphasized that it will strengthen efforts to combat financial crimes using blockchain technology. The attacks on KyberSwap and Indexed Finance resulted in losses exceeding $65 million, and the prosecution called for global law enforcement collaboration to capture Medjedovic and freeze related fund flows.