A 22-year-old Canadian math graduate, Andean Medjedovic, allegedly exploited vulnerabilities in DeFi protocols like KyberSwap and Indexed Finance, draining $65 million. Using flash loans and rebalancing flaws, he manipulated pricing logic, creating arbitrage-like conditions. The U.S. charged him with wire fraud, hacking, and money laundering.
The case highlights a critical intersection of DeFi, law, and taxation. Canadian tax law struggles to classify earnings from such exploits. While U.S. authorities focus on criminal intent, the case raises questions about accountability, especially when code fails. It emphasizes the need for smart contract audits, transparent reporting, and proactive engagement with regulators.
