FTX's $400M Hack: US Prosecutors Link Theft to Trio Charged with SIM Swap Attacks
Summary:
U.S. prosecutors have tied the $400 million hack of cryptocurrency firm FTX to three individuals charged with orchestrating a series of SIM swap attacks. The trio, accused of stealing the identities of 50 people to siphon off massive amounts of cryptocurrency, allegedly targeted FTX soon after its bankruptcy filing. Blockchain security firm Elliptic and a Bloomberg report both assert that FTX fits the description of "Victim Company-1" detailed in the court filing. The stolen funds were reportedly transferred to cryptocurrency exchange Kraken and then moved through various blockchains to launder the sum. The accused face charges of wire fraud conspiracy and identity theft.
In the wake of its bankruptcy, FTX saw a whopping $400 million plundered from its coffers. Recently, US prosecutors have attributed this to a trio that they had indicted last month. The trio is believed to have amassed large sums of cryptocurrency by executing a sequence of SIM swap attacks. A legal file dated January 24, tabled at a District Court in Washington, D.C, implicates Robert Powell, Carter Rohn, and Emily Hernandez in these attacks. They reportedly stole the identities of 50 people and manipulated telecom companies into transferring these victims' phone numbers to their own devices.
Details within this court document suggest that FTX fell prey to this assault. As per the file, 'Victim Company-1', believed to be FTX, experienced an attack on November 11 and 12, 2022. Hernandez is accused of impersonating a staff member, following which Powell is alleged to have commandeered their AT&T account. He supposedly accessed the company's accounts and siphoned off more than $400 million in cryptocurrency.
Blockchain security company Elliptic hinted in a February 1 blog post that 'Victim Company-1' is probably FTX, given the sizable unauthorized transactions resulting in a loss of approximately $400 million following their bankruptcy announcement. A Bloomberg report from the same date corroborates this, with sources familiar with the case identifying FTX as the company mentioned in the indictment.
The stolen money was supposedly transferred to cryptocurrency exchange Kraken soon after the incident. Kraken's Chief Security Officer, Nick Percoco, assured his community that the identity of the alleged perpetrator was known.
For the following months, the stolen cryptocurrency traversed various blockchains and routes as part of an elaborate laundering scheme.
Several well-known entities in the crypto world have fallen victim to a surge of similar attacks that hijack multi-factor authentication codes, often used during logins, through SIM swapping. The U.S. Securities and Exchange Commission also confirmed being a target, with hoaxers falsely announcing the approval of spot Bitcoin exchange-traded funds from its account.
John J. Ray III, FTX's CEO and restructuring head, highlighted the exchange's lackluster security and deficient systems as a nightmare to grapple with post-bankruptcy - making it an attractive target for such criminals.
Powell, Rohn and Hernandez face charges of conspiracy to commit wire fraud and identity theft.
Published At
2/2/2024 4:13:43 AM
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