The Indexed Finance and KyberSwap exploits
According to the indictment, Medjedovic first targeted the DeFi Indexed Finance in October of 2021 and was able to bilk US$16.5 million in investor cryptocurrency from what’s known as “liquidity pools.”The liquidity pools, which the DOJ said functions like a mutual fund in traditional finance, hold an index of digital “tokens,” and are autonomously managed by a computer code called “smart contracts,” which the Bank of Canada defines as a “custodian” that executes automatically based on “predetermined conditions.”
“Medjedovic used hundreds of millions of dollars in borrowed cryptocurrencies to distort a process called ‘re-indexing,’ which was used by the Indexed Finance smart contracts to add a new token to the liquidity pools. Medjedovic used the borrowed cryptocurrency to engage in manipulative trading to cause the Indexed Finance smart contracts to set artificial prices during the re-indexing process,” officials said in a prepared statement.
Then, two years later, Medjedovic allegedly carried out a similar scam on KyberSwap, but this time investigators said he made off with US$48.8 million.
The indictment stated that in that case, Medjedovic attempted to extort KyberSwap’s developers after the fact and demanded control of the platform, for which he would return 50 per cent of the cryptocurrency he had stolen.
“I know this is probably less than what you wanted. However, it is also more than you deserve,” he allegedly wrote in a message to KyberSwap and investors on the platform.
https://www.indiatimes.com/worth/ne...tform-and-refuses-to-return-funds-570269.html
https://www.justice.gov/opa/pr/canadian-man-charged-65m-cryptocurrency-hacking-schemes
https://www.cp24.com/news/2025/02/0...-named-in-alleged-us65-million-crypto-scheme/
