A Canadian man, Andean Medjedovic, found himself at the center of a criminal indictment unsealed in federal court in New York, accused of exploiting vulnerabilities in decentralized finance protocols to defraud investors of approximately $65 million. The charges stem from Medjedovic’s alleged actions between 2021 and 2023, where he purportedly manipulated smart contracts used by the KyberSwap and Indexed Finance protocols to deceive and siphon funds from unsuspecting individuals.
The court documents reveal that Medjedovic took advantage of flaws in the automated smart contracts of the two protocols, borrowing significant amounts of digital tokens to engage in deceptive trading practices. By strategically executing trades that he knew would cause the protocols’ smart contracts to miscalculate critical variables, Medjedovic was able to withdraw millions of dollars from the systems at artificially inflated prices, leaving investors with worthless investments.
Furthermore, it is alleged that Medjedovic engaged in money laundering schemes to disguise the origins and ownership of the fraudulently obtained funds. Through a series of complex transactions, including swap and “bridging” activities, as well as utilizing a digital assets mixer, Medjedovic attempted to obscure the illicit source of the funds. Additionally, he purportedly collaborated with others to open accounts on digital assets exchanges using falsified or borrowed identifying information to further conceal the proceeds’ true nature.
One particularly audacious move by Medjedovic involved an extortion attempt following the KyberSwap exploit, wherein he reportedly demanded complete control of the protocol and the associated decentralized autonomous organization in exchange for returning a portion of the stolen digital assets. This brazen move further demonstrates the lengths to which Medjedovic allegedly went to cover his tracks and capitalize on his illicit activities.
The charges leveled against Medjedovic include wire fraud, unauthorized damage to a protected computer, attempted extortion under the Hobbs Act, and money laundering conspiracy and actual money laundering. If convicted, he faces a maximum sentence of 10 years for the computer damage charge and up to 20 years for each of the remaining offenses. Ultimately, a federal district court judge will determine the appropriate sentence based on sentencing guidelines and statutory factors.
The announcement of these charges was made by key officials, including Supervisory Official Antoinette T. Bacon from the Justice Department’s Criminal Division, U.S. Attorney John J. Durham for the Eastern District of New York, Chief Guy Ficco from IRS Criminal Investigation, Special Agent in Charge William S. Walker from Homeland Security Investigations New York, and Assistant Director in Charge James E. Dennehy from the FBI New York Field Office.
The investigation into this case involves multiple agencies, including IRS-CI, HSI, FBI New York Field Office, U.S. Customs and Border Protection’s New York Field Office, and the Justice Department’s Office of International Affairs. International cooperation from the Netherlands’ Public Prosecution Service and Cybercrime Unit of the Dutch National Police has also been instrumental in advancing the investigation.
Handling the prosecution of the case are Trial Attorney Tian Huang from the Criminal Division’s Fraud Section, along with Assistant U.S. Attorneys Nicholas Axelrod and Andrew Reich from the Eastern District of New York. Significant assistance has been provided by SEC Enforcement Attorney Daphna A. Waxman, formerly associated with the National Cryptocurrency Enforcement Team (NCET).
It is imperative to note that an indictment represents an accusation, and all defendants are considered innocent until proven guilty in a court of law beyond a reasonable doubt. As this case unfolds, the allegations against Andean Medjedovic will be subjected to scrutiny and the legal process to determine the veracity of the claims made against him.