Canadian hacker charged by US with stealing $48M from Vietnam blockchain project

The U.S. Department of Justice announced the charges Monday, stating Medjedovic exploited vulnerabilities in DeFi platforms KyberSwap and Indexed Finance to steal cryptocurrency.

Tran Huy Vu, co-founder and CEO of Kyber Network, said the company has yet to recover the stolen funds but fully compensated the victims.

Cryptocurrency coins. Illustration by Pixabay

The attack, described as "the most complex and carefully engineered smart contract exploit," occurred on Nov. 26, 2023.

Medjedovic manipulated vulnerabilities in KyberSwap’s smart contract, executing multiple transactions to maximize his gains.

According to the indictment, he meticulously planned the attack, analyzing activity patterns of KyberSwap’s CEO and users in the U.S. and Europe before launching the hack during low-traffic hours to avoid detection.

He allegedly drained funds from 77 liquidity pools on KyberSwap, moving the $48.4 million through blockchain "bridge" protocols and cryptocurrency "mixers" to obscure its origin.

He then allegedly attempted to extort KyberSwap by demanding control of the company in exchange for returning some of the stolen funds.

He now faces charges of extortion, money laundering conspiracy and unauthorized computer tampering, each carrying potential sentences of 10 to 20 years in prison.

"This was a sophisticated fraud that exploited vulnerabilities in ‘smart contracts’, resulting in the theft of millions of dollars in cryptocurrency," IRS-CI New York special agent in charge Harry T. Chavis said.

"Even with the complexities of DeFi, we tracked down who is responsible for this large-scale theft."

The attack had significant consequences for Kyber Network, which, by late 2023, was forced to restructure, cutting 50% of its workforce and shutting down KyberSwap Elastic.