US Charges 3 In $400 Million Sim-Swapping Hack Linked To FTX

A U.S. court charged three individuals for orchestrating a series of SIM-swap hacks tied to the fallen cryptocurrency exchange FTX.

In the Jan. 24 filing by federal prosecutors in the U.S. District Court for the District of Columbia, Robert Powell, Carter Rohn, and Emily Hernandez were charged with two counts of conspiracy to commit wire fraud, aggravated identity theft, and access device fraud.

The grand jury indictment stated that the three carried out SIM-swap attacks for more than two years, stealing the identities of 50 victims and getting telecom companies to port the victims' phone numbers to their own phones.

In SIM-swapping, cybercriminals intercept multifactor authentication codes that are often used for logging in and out of accounts.

The court document did not specifically mention Sam Bankman-Fried's FTX as a victim in the SIM-swap hacks, but said that from Nov. 11-12, 2022, the co-conspirators "transferred over $400 million in virtual currency from Victim Company-1's virtual currency wallets to virtual currency wallets controlled by the co-conspirators."

In particular, Hernandez allegedly used a counterfeit identification with the details of a Victim Company-1 employee to convince AT&T to transfer the employee's mobile phone account to another SIM card. Powell then allegedly made use of various authentication codes to access the company's cryptocurrency wallets.

Blockchain security firm Elliptic wrote in a Thursday blog post that it "appears likely that FTX is the 'Victim Company-1' named in the indictment," based on the firm's monitoring of stolen FTX assets in the years since the platform was hacked.

Two unnamed people familiar with the case confirmed to Bloomberg that "Victim Company-1" was actually FTX.

Bankman-Fried's crypto exchange, FTX, filed for bankruptcy on Nov. 11, 2022. Hours after the filing, hundreds of millions of dollars worth of digital currency were drained from the platform. At the time, there was speculation that the incident was an inside job.

FTX's new CEO, John Ray, said at the time that there was "unauthorized access to certain assets" and the company was taking steps to secure all assets.

Meanwhile, FTX has scrapped plans to relaunch the crypto exchange after investors and potential bidders showed no interest in funding a rebuilding campaign.

FTX attorney Andy Dietderic said at a Wednesday bankruptcy court hearing that the company will now focus on liquidating its assets and is expecting to repay customers whose deposits on the exchange were frozen when FTX collapsed.

On the other hand, Bankman-Fried, convicted of fraud, is scheduled to be sentenced on March 28 on seven counts of fraud and other related charges. He requested for his sentencing to be pushed back, but the motion was denied, adding to the disgraced crypto mogul's many legal losses since his once soaring exchange plummeted.