Student arrested in US for US$5 mln crypto theft via SIM jacking

August 01, 2018 12:09
The cryptocurrency world saw another hack, with fraudsters reportedly stealing millions in virtual assets through ‘SIM jacking’. Photo: Reuters

California police have arrested a college student who is suspected to have stolen US$5 million in bitcoin and other cryptocurrencies through a hacking technique known as 'SIM jacking'.

Tech news website Motherboard reported, citing court documents obtained by it, that Joel Ortiz, a 20-year-old college student from Boston, has been accused of hijacking more than 40 phone numbers with the help of some accomplices.

Ortiz and his associates targeted people involved in the cryptocurrency and blockchain field, allegedly hacking several crypto investors, including some people who attended the blockchain conference Consensus in New York City this May.

Ortiz was arrested at the Los Angeles International Airport while he was on his way to Europe, according to the report.

He now faces 28 charges including 13 counts of identity theft, 13 counts of hacking, and two counts of grand theft.

Motherboard claimed that it is the first reported case against someone who allegedly used the so-called SIM swapping or SIM hijacking technique which has been used to steal virtual currency.

According to the publication, the attack consists of tricking a phone carrier’s security system to swap the target’s phone number to a SIM card controlled by the criminal.

The fraudsters then use the phone numbers to reset the victims’ passwords and break into their online accounts, of which cryptocurrency accounts are commonly targeted.

In some cases, fraudsters can bypass the target account’s true two-factor authentication systems.

According to the Motherboard report, one of the attendees of the Consensus conference has seen more than US$1.5 million getting stolen.

“According to court documents, Ortiz took control of the entrepreneur’s cell phone number, reset his Gmail password and then gained access to his cryptocurrency account,” the publication wrote.

This article appeared in the Hong Kong Economic Journal on August 1

Translation by Ben Ng with additional reporting

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Hong Kong Economic Journal