SIM Swap Scam to Blame for $400M FTX Hack as Attackers Are Charged

The mystery behind the massive hack of Sam Bankman-Fried’s FTX exchange shortly after it filed for bankruptcy has been solved. Three people have been charged by the US Department of Justice for orchestrating a SIM-swapping scam that resulted in the theft of more than $400 million from FTX in November 2022.

The trio were accused of participating in a SIM-swapping ring that targeted FTX and other individuals over two years.

SIM Swap Trio Charged 

The DoJ has charged Robert Powell of Illinois, Emily Hernandez of Colorado, and Carter Rohn of Indiana, according to a February 2 Bloomberg report. Authorities charged them with fraud and identity theft.

Shortly after the firm filed for bankruptcy, hackers drained more than $400 million in crypto. They then channeled it through a web of decentralized exchanges. 

Sam Bankman-Fried (SBF), who stepped down as CEO, distanced himself from the hack but speculated that it could have been an inside job. SBF currently faces decades in prison after his conviction for fraud late last year.

Read more: 15 Most Common Crypto Scams To Look Out For

According to the indictment, the attackers harvested the personal data of about 50 victims. This was used to convince cell phone providers to port the victims’ phone numbers to a dummy phone in their possession. 

How SIM-Swap fraud occurs. Source: CyberHoot
How SIM Swap fraud occurs. Source: CyberHoot

This allowed them to intercept authentication codes and break into financial accounts and crypto wallets, including FTX’s.

SIM swapping involves manipulating phone company reps to transfer targets’ phone numbers to the hackers. This method has become popular among hackers targeting crypto exchanges.

Hernandez used a fake ID with an FTX employee’s details to convince AT&T to transfer the mobile phone account to another SIM card, according to the report. Powell then used various authentication codes to access FTX’s crypto wallets, it added. 

AT&T has been sued for facilitating SIM swap attacks resulting in crypto thefts in the past. 

Attacks on the Rise

The report revealed that,

“The FBI received 2,056 SIM-swapping complaints, with losses totaling $71.6 million, up from 1,611 complaints and $68 million in losses the year before.”

Even the SEC has been a victim of this attack vector. In January, a SIM swap attack occurred because hackers exploited lax security to hack its X account.

Moreover, the social earnings platform has been a magnet for phishing and SIM-swapping attacks. 

One of the largest leaks in the industry, hardware wallet Ledger’s server hack in 2020, kicked off a torrent of SIM swap attacks targeting victims. 

Top crypto platforms in the US | February 2024

The post SIM Swap Scam to Blame for $400M FTX Hack as Attackers Are Charged appeared first on BeInCrypto.

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