SIM-Swap Crypto Thefts – Student Gets 10 Year Jail Term

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SIM-Swap Crypto Thefts

Student Gets 10-Year Jail Term for SIM-Swap Crypto Thefts Worth $7.5 Million

SIM-swapping hacksA 21-year-old student from the U.S. who stole over $7.5 million in cryptocurrency by means of SIM-swapping hacks has actually been sentenced to 10 years in jail.

The Santa Clara County’s District Attorney’s Office revealed Monday that the criminal, Joel Ortiz, had actually hacked the mobile phones of at least 40 individuals. Ortiz was a “prolific” SIM swapper, the Attorney’s Office said, including that in one criminal activity in May 2018, he took more than $5.2 million “in minutes” from a cryptocurrency business owner in Cupertino, California.

He “extravagantly” spent the taken funds, consisting of $10,000 at Los Angeles clubs, employing a helicopter to go to a music festival and on Gucci luggage and clothes, according to the release.

Ortiz was apprehended at Los Angeles International Airport last year and pleaded no contest (accepting the charges but not pleading guilty) to 10 felony crime charges earlier this year.

After two hearings, Ortiz was sentenced on Friday by Santa Clara County Judge Edward Lee, becoming one of the first individuals in the U.S. to be convicted of taking cryptocurrency by SIM switching.

Judge Lee said:

“These are not Robin Hoods. These are crooks who use a computer instead of a gun. They are not just stealing some ethereal, experimental currency. They are stealing college funds, home mortgages, people’s financial lives.”

crooks who use a computer instead of a gunThe case was examined by the REACT (Regional Enforcement Allied Computer Team) Task Force, which consequently secured $400,000 from Ortiz after his arrest. The remainder of the funds have either been invested or have been hidden, the Attorney’s Office stated.

SIM-swap hacks, in which criminals manage to clone victims’ SIM cards in order to access online accounts, are an increasingly popular method of crypto theft. Earlier this year, a 20-year-old male from Ohio was formally charged in a New York Supreme Court indictment for stealing the identities and cryptocurrency holdings of over 50 victims throughout the U.S. by means of SIM-swaps.

In November, U.S. based law practice Silver Miller submitted arbitration claims versus AT&T and T-Mobile on behalf of victims of SIM-swap hacks, stating its customers had actually lost over $621,000 in cryptocurrency in this way.

The law firm alleged:

“By leaving holes in their security procedures and failing to effectively train and monitor their staff members, mobile phone companies have actually helped thieves in remotely taking over the SIM cards in people’s smartphones, accessing financial records and account information of the victims, and clearing the victim’s accounts of cryptocurrency and other major assets.”

money stolen through rip-offs and theft increased by 300% According to a statement on the state of money laundering and crypto from analytics firm Ciphertrace, the amount of money stolen through rip-offs and theft increased by 300% over the last year to about $1.7 Billion. Strangely, this figure doesn’t account for private account rip-offs, which are hard to account for, but fake ICOs, exit scams, exchange hacks. Hackers accounted for over $900 Million of this figure.

The report defined a variety of growing issues over new techniques and vulnerabilities which are pestering crypto. For example, SIM switching methods have become increasingly popular as a way of attack. A SIM switching attack makes the most of two-factor authentication procedures, which typically validates a user’s identity using their phone. If a hacker can port a user’s contact number into their own device, they can receive an SMS message plan to validate the identity of the user and alter their password, gaining access to their account, possibly to their crypto wallets.

Big cryptocurrency financiers are targeted particularly, or information dumps can make contact numbers readily available for purchase off the dark web. While SIM swapping can potentially target any digital funds, hackers have been receptive to take cryptocurrency due to the fact of the greater ease with which funds can be made off with without detection.

FBI Warns About ‘SIM Swapping’ Hacks Targeting Cryptocurrency Users

SIM switching hackThroughout a SIM switching hack, a hacker is able to get control of the victim’s phone number by deceiving their carrier into moving the number to a new device that the hacker controls. This kind of attack does not need the victim to carry out any action, such as clicking a link, downloading infection software application or any other type of activity to activate the hack.

Rather, the hacker actively works by engaging the telephone carrier of the victim until they have the ability to persuade the provider that they are the real users of the account, and that they are interested in triggering a different device using that very same number.

When the hacker has the ability to successfully fool the carrier into thinking that they are the authorized user, they get the telephone number of the victim. They then continue to utilize the newly-found access to initiate password resets on all the victim’s online accounts such as email, social networks, cryptocurrency exchanges, and others. If a smart phone number is utilized for two-factor authentication, they have the ability to bypass these checks too.

This procedure is likewise usually followed by raiding online wallets of any cryptocurrencies the victim may have, locking their email and social media accounts to prevent the owner gaining back control, and requesting a ransom to be paid in bitcoin to open the accounts.

SIM card image via Shutterstock

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