Excerpt: “A five-count criminal indictment was unsealed today in federal court in New York charging a Canadian man with exploiting vulnerabilities in two decentralized finance protocols to fraudulently obtain about $65 million from the protocols’ investors. According to court documents, from 2021 to 2023, Andean Medjedovic, 22, allegedly exploited vulnerabilities in the automated smart contracts used by the KyberSwap and Indexed Finance decentralized finance protocols. Medjedovic borrowed hundreds of millions of dollars in digital tokens, which he used to engage in deceptive trading that he knew would cause the protocols’ smart contracts to falsely calculate key variables. Through his deceptive trades, Medjedovic was able to, and ultimately did, withdraw millions of dollars of investor funds from the protocols at artificial prices, rendering the victims’ investments essentially worthless. Medjedovic also allegedly laundered the proceeds of his fraudulent schemes through a series of transactions designed to conceal the source and ownership of the funds, including through swap transactions, ‘bridging transactions,’ and the use of a digital assets ‘mixer.’ With others, Medjedovic also allegedly schemed to open accounts with digital assets exchanges using false and borrowed identifying information to conceal the source and true ownership of the proceeds.”