Almost a million dollars worth of Bitcoin was stolen from Shapeshift, a cryptocurrency exchange platform.
The crime was committed from the inside by an employee who allegedly took advantage of his position in the company to cook up the job. Azamat Mukhiddinov, previously employed as senior software engineer, was sued for alleged theft of 90 Bitcoin units amounting to around $900,000 through an inside hack.
The company’s chief legal officer Veronica McGregor assured that none of the customer funds were touched amid the entire situation and were never put at any form of risk because Shapeshift is non-custodial, although quite a lot of time, effort, and money were spent with the legal measures taken to deal with it.
Apparently, the suspect performed the crime via his access to the back office server of the site/app and got away with the aforementioned amount way back in May 2020. However, the legal complaint was filed just recently on August 26.
Mukhiddinov was hired by Shapeshift in September of 2018. As a senior software engineer, he had access to the network’s software operations, codes, servers, and all other aspects that keep the platform afloat online and was one of the people responsible for running them smoothly. According to sources, he started thieving in November 2019 and it went on until May of this year when he was caught.
As an employee, Azamat was said to have signed a contract before his official employment that disallowed him to use his privileges in the company for personal interest. Details stated in the contract also included that Azamat was not allowed to put additional softwares of applications into the central system without permission from the company executives. But Mukhiddinov was able to do so and managed to keep it under wraps for the entire time he was pocketing Bitcoin from the company. While he was responsible for securing the company’s servers from external threats, Shapeshift was not aware that the threat was already inside.
It worked to his advantage as well that Shapeshift already had a security flaw. The third party software that he discreetly installed was able to transfer 0.5 BTC to his personal pocket.
When the company began to take notice, they conducted an investigation. The series of acts were traced back to him and he admitted to the crime on May 25, 2020. Legal actions were taken and Azamat was in some way, able to return what he took but also demands compensation for the effort and money spent on the investigation.
As a result to this, Shapeshift was forced to postpone the launching of their mobile app for many months to polish its security. In July, it was finally released. According to McGregor, the new app is “a self-custody crypto interface with integrated trading.”
Since its operations began in 2013, Shapeshift has fell victim in numerous inside jobs before. In 2016, couple hundred thousand dollars were taken from the company. The platform was an idea of Erik Vorhees, ranked 37th in the popular personalities in the crypto industry by Cointelegraph.