FTX Loses Over $400M in Crypto Due to SIM-Swap Hack
The now-defunct crypto exchange FTX suffered a loss of over $400 million in crypto as a result of a SIM-swap hack, according to prosecutors. This incident occurred shortly after FTX filed for bankruptcy.
Three Individuals Orchestrated the SIM-Swap Attack
The U.S. Department of Justice has filed an indictment in federal court in Washington, accusing three individuals—Robert Powell, Emily Hernandez, and Carter Rohn—of participating in a SIM-swapping ring that targeted FTX for two years. The trio allegedly obtained personal data from multiple victims and used it to convince cell phone providers to transfer the victims’ phone numbers to their fraudulent device. This allowed them to intercept text messages, including authentication codes.
FTX Identified as the Victim
Although the indictment did not explicitly name FTX, sources familiar with the case confirmed that “victim company-1” referred to the crypto exchange. Prosecutors revealed that Emily Hernandez used a fake ID containing details of an FTX employee to convince AT&T to transfer the mobile phone account. Robert Powell then attempted various authentication codes to access FTX’s cryptocurrency wallets.
FTX’s Bankruptcy and Legal Consequences
In November 2022, FTX made headlines when it filed for Chapter 11 bankruptcy after discovering an $8 billion shortfall in its accounts. The founder of FTX, Sam Bankman-Fried, now faces potential imprisonment for up to 100 years on multiple charges.
Hot Take: FTX’s Devastating Loss Highlights Ongoing Security Threats
The massive loss suffered by FTX due to a SIM-swap hack serves as a stark reminder of the persistent security threats faced by the crypto industry. This incident underscores the importance of robust security measures, including two-factor authentication and vigilant protection of personal data. Crypto users must remain cautious and proactive in safeguarding their assets to prevent falling victim to similar attacks. As the crypto landscape continues to evolve, it is crucial for exchanges and individuals alike to prioritize cybersecurity and stay ahead of emerging threats.
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