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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteAndean Medjedovic, a 22-year-old Canadian national, was indicted in the United States over alleged attacks on Indexed Finance and KyberSwap that prosecutors say obtained approximately $65 million in cryptocurrency. The indictment was unsealed on February 3, 2025; it is an allegation, not a conviction. The U.S. Department of Justice said Medjedovic was at large when it announced the charges and that he is presumed innocent unless proven guilty beyond a reasonable doubt.
What prosecutors allege
The federal indictment in the Eastern District of New York (docket no. 24-CR-529) charges Medjedovic with five counts: wire fraud, unauthorized damage to a protected computer, attempted Hobbs Act extortion, money-laundering conspiracy, and money laundering. The government says the alleged conduct involved two separate DeFi incidents, roughly two years apart:
| Incident | Date alleged | Prosecutors’ estimated amount | Scope |
|---|---|---|---|
| Indexed Finance | October 2021 | Approximately $16.5 million | Two liquidity pools |
| KyberSwap Elastic | November 2023 | Approximately $48.8 million | 77 pools on six public blockchains |
The two estimates total about $65.3 million, which explains the government’s rounded description of approximately $65 million. The cited government materials give approximate dollar values but do not, in the available excerpts, provide a complete valuation methodology.
News coverage has called Medjedovic a “math wiz.” Prosecutors and reporting point to a master’s degree in mathematics from the University of Waterloo, but mathematical ability or education is not evidence by itself of criminal intent or responsibility.
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DeFi terms that explain the allegations
Decentralized finance (DeFi) uses blockchain-based software to provide services normally associated with banks or brokers. A liquidity pool holds tokens supplied by users so trades can occur. An automated market maker (AMM) applies programmed formulas to set prices and execute swaps. A smart contract is code deployed on a blockchain that performs its stated rules when transaction conditions are met.
A flash loan or similar temporary borrowing arrangement can provide very large trading capital without conventional collateral, provided the transaction’s conditions are satisfied. If those conditions fail, the transaction can revert; borrowed capital therefore increases both reach and execution risk. “Decentralized” does not eliminate coding errors, manipulated inputs, governance control, or criminal liability.
How the Indexed Finance exploit allegedly worked
According to the indictment and the Eastern District of New York announcement, Medjedovic allegedly:
- Borrowed hundreds of millions of dollars in digital tokens.
- Used trades designed to create artificial token prices.
- Allowed those prices to affect Indexed Finance’s re-indexing process, which added a token to an index pool.
- Caused the contracts’ accounting to use the manipulated prices when calculating pool positions.
- Withdrew approximately $16.5 million in investor cryptocurrency.
Indexed Finance pools functioned somewhat like mutual funds or exchange-traded funds, but held baskets of digital tokens rather than traditional securities.
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How the KyberSwap exploit allegedly worked
Prosecutors describe a different episode in November 2023 involving KyberSwap Elastic:
- Medjedovic allegedly borrowed hundreds of millions of dollars in cryptocurrency.
- He allegedly created artificial prices in KyberSwap liquidity pools.
- He allegedly submitted carefully calculated swaps that made the AMM miscalculate available liquidity.
- He allegedly extracted liquidity at the resulting manipulated prices.
- He allegedly repaid the borrowing and retained the withdrawn tokens.
The government says the activity affected 77 pools across six public blockchains. The indictment describes many swaps bundled into a single cryptographic transaction, allowing them to execute in rapid succession. Ars Technica provides additional technical context in its account of the case.
What “the smart contract glitched” means here
The alleged “glitch” was not necessarily a random crash. The prosecution’s account describes contracts that continued following their written rules while producing exploitable economic results because their calculations received manipulated market inputs.
- Code bug: an unintended defect in software.
- Economic exploit: using valid transaction mechanics or market conditions to obtain an unintended financial result.
- Manipulation: deliberately changing prices, liquidity, timing, or other inputs so the rules favor the trader.
- Unauthorized computer damage: a legal theory charged in the indictment, not a synonym for every smart-contract exploit.
That distinction matters: the allegations do not describe password theft, breaking encryption, or taking control of an entire blockchain. “Hack” is a broad headline term for conduct prosecutors characterize through specific fraud, computer-damage, extortion, and money-laundering statutes.
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After the KyberSwap incident, prosecutors say Medjedovic offered to return approximately half of the cryptocurrency in exchange for control of the KyberSwap protocol and its decentralized autonomous organization (DAO). The government treats that demand as attempted extortion, not as a conventional bug bounty or ordinary recovery negotiation. The allegation is detailed in the DOJ Office of Public Affairs announcement.
How prosecutors say the funds were laundered
The indictment alleges a series of efforts to make the cryptocurrency harder to attribute or recover:
- Bridging assets between blockchains.
- Using a cryptocurrency mixer to obscure the funds’ origin.
- Opening exchange accounts with false or borrowed identifying information.
- Preparing a written playbook for moving funds through a mixer.
- Discussing ways to circumvent know-your-customer (KYC) controls.
Prosecutors also allege that, after a bridge protocol froze transactions, Medjedovic agreed to pay approximately $80,000 to an undercover agent posing as a software developer to help release roughly $500,000 in cryptocurrency. Ars Technica reports the proposed payment as approximately $86,559, a discrepancy from the DOJ’s rounded figure.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How investigators allegedly identified him
The government’s account says Ontario authorities had previously charged Medjedovic in connection with the Indexed Finance episode. It also alleges that he planned to leave Canada and developed a relationship with a person who was an undercover law-enforcement source. He allegedly offered that person approximately $86,559 to move funds from platforms that had restricted him. These are allegations in the indictment, not findings after a trial.
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Programmable rules can amplify bad inputs
AMMs and index pools execute automatically, but their outputs depend on prices, liquidity, transaction ordering, and accounting assumptions. A contract can be deterministic and still be economically exploitable when those assumptions fail under adversarial trading.
Audits do not remove economic risk
A code audit may identify conventional defects, yet it cannot guarantee that every market-manipulation path, re-indexing edge case, or interaction among protocols is safe. Security review must include economic modeling and adversarial simulations as well as line-by-line code analysis.
Decentralization still has control points
Developers, upgrade administrators, DAOs, bridges, centralized interfaces, exchanges, and compliance systems can all affect what happens. The alleged laundering attempts illustrate that bridges may freeze transfers, exchanges can restrict accounts, and investigators can trace public blockchain activity even when transactions cross networks.
Legal stakes and what is not known
The DOJ says the unauthorized-computer-damage count carries a statutory maximum of 10 years and each of the other four counts carries a maximum of 20 years. Those are maximum penalties authorized by statute, not a prediction of a sentence. Any sentence would depend on a conviction, sentencing rules, judicial findings, and other case-specific factors.
The available announcements and indictment establish the February 2025 charges and allegations, but do not establish a conviction, plea, arrest after the announcement, trial result, sentence, recovered funds, or final technical findings about either exploit. Later court records or official updates would be needed to establish those developments.
For the primary record, see the EDNY release, the DOJ public-affairs release, and the indictment.
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