An indictment was revealed in Brooklyn's federal court against Andean Medjedovic, who faces charges of wire fraud, computer hacking, and attempted extortion. The charges relate to the theft of around $65 million in cryptocurrency from two decentralized finance (DeFi) protocols: KyberSwap and Indexed Finance. Medjedovic is also accused of laundering the stolen funds and remains at large.
The announcement came from several officials, including John J. Durham, United States Attorney for the Eastern District of New York; Antoinette Bacon from the Justice Department’s Criminal Division; Harry T. Chavis, Jr., Special Agent in Charge at IRS-CI New York; James E. Dennehy from the FBI's New York Field Office; and William S. Walker from Homeland Security Investigations New York.
Durham stated, “As alleged, the defendant executed a highly sophisticated scheme to exploit two decentralized finance protocols and steal tens of millions of dollars’ worth of cryptocurrency from investors.” He emphasized the commitment to prosecuting crimes involving new technologies.
Chavis noted that this case involved a complex fraud exploiting vulnerabilities in "smart contracts," resulting in significant losses for liquidity pool investors. He highlighted cooperation with international partners like Europol during the investigation.
Dennehy commented on the broader implications of cybercrime: “Hackers can at times be painted in a flattering light by pop culture... We allege Andean Medjedovic violated several of those laws.”
Walker added that these charges reflect efforts to combat transnational cybercrime: “Our global reach... allow us to rapidly develop investigations into bad actors who seek to exploit the cryptocurrency market.”
Medjedovic allegedly manipulated trading within KyberSwap and Indexed Finance protocols to drain approximately $65 million from liquidity pools managed by smart contracts. In November 2023, he reportedly used borrowed cryptocurrency to manipulate prices within KyberSwap's system and stole about $48.8 million.
Additionally, Medjedovic attempted extortion against KyberSwap developers and stakeholders by demanding control over their protocol in exchange for returning part of the stolen funds. He also sought to launder his proceeds through various means.
In a similar manner, Medjedovic exploited Indexed Finance's system in October 2021 using manipulative trading tactics during their re-indexing process on Ethereum network pools, resulting in a theft of approximately $16.5 million.
Following these exploits, he conspired with another individual to launder his gains through false accounts and mixers while maintaining detailed plans for moving large sums discreetly.
The prosecution team includes Assistant U.S. Attorneys Nick M. Axelrod and Andrew D. Reich along with NCET Trial Attorney Tian Huang among others, supported by Paralegal Specialists Liam McNett and Madison Bates as well as SEC Enforcement Attorney Daphna A. Waxman.
International collaboration played a crucial role with contributions from entities such as the Netherlands' Public Prosecution Service and Dutch National Police’s Cybercrime Unit alongside U.S Customs and Border Protection.
The defendant is presumed innocent until proven guilty according to legal standards.