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Business & Finance

$1.5 Million in Cryptocurrency Were Stolen by a 20-Year Old with SIM Hijacking

As days are going by with every single day bringing innovative and groundbreaking technologies to the surface, the devious minds of the thieving world are trying to keep up as well by thinking of new ways to rob people of their money. In this particular case, their digital currencies. Although Blockchain technology is deemed to be safe, but in no way it can stop thieves from defrauding people. Cases of theft are being reported all over. However, this particular way of robbing people was rather unheard of.

A 20-year-old college student, Joel Ortiz, was apprehended in Boston, Massachusetts California on the charges of being part of an illegal activity i.e. stealing. The young man was guilty for ganging up with several others in order to steal bitcoin and other digital currencies by hacking other people’s cellphone numbers. Allegedly, they stole over a whopping five million dollars.

This was the first ever case reported in which cryptocurrency was stolen, using a technique called SIM swapping or SIM hijacking. SIM hijacking means to transfer phone number details to the criminal’s phone. The criminals can then use those details to access passwords and change details as well as empty out the accounts holding money. Joel and his accomplices, apparently stole digital currency from 40 people using this technique.

Once they got a hold of their passwords, they would reset them before stealing any of their digital assets.

Ortiz and his fellow gang members, targeted the people involved in the world of cryptocurrency and blockchain. Specifically people present in the high-profile Consensus conference in New York City in May. One of them reported this incident by telling that his phone went off without any reason and he immediately understood what had happened because the same thing had happened to an acquaintance. Ortiz allegedly stole more than $1.5 million from a cryptocurrency entrepreneur. One of at least three people got their accounts hacked and were a victim in that conference.

Ortiz was not only charged with hijacking SIMS to steal cryptocurrency but also he used to hack valuable accounts on social media and sell them for bitcoins. Ortiz used to sell these Instagram and Twitter accounts on a site called OGUSERS.

All these charges combined, Joel Ortiz is facing 28 charges; 13 counts of identity theft, 13 counts of hacking, and 2 counts of grand theft, according to the complaint filed against him. Erin West, the Santa Clara County deputy district attorney, alerted other victims by saying,

This is happening in our community and unfortunately there are not a lot of complaints to law enforcement about it. We would welcome the opportunity to look into other complaints of this happening; we think that this is something that’s under reported and very dangerous.

His bail was set to one million dollars and his plea is to be heard in court on Aug 9.

The number reported cases of this kind of fraud has been increasing throughout the years. As the technology progresses so do the thieving techniques. FBI also released a statement warning people to beware of the technical support frauds. This is how it works.

Criminals pose as virtual currency support. Victims contact fraudulent virtual currency support numbers usually located via open source searches. The fraudulent support asks for access to the victim’s virtual currency wallet and transfers the victim’s virtual currency to another wallet for temporary holding during maintenance. The virtual currency is never returned to the victim, and the criminal ceases all communication.

So the big question now is how to remain safe from being scammed?

Several companies have provided services in order to keep their users safe. AT&T allows their customers to enter a pass-code in addition to the general password for performing activities such as porting the number to a different SIM card. Verizon is providing a similar service. T-Mobile has also taken steps to minimize the number of frauds by adding a port validation feature. Sprint offers customers a unique Pin when they try to swap SIMS.

Another precautionary measure is to not link any of your accounts to your number. In the event that your number is stolen you could detach the SIM from these accounts, thereby, avoiding the hacker from accessing any of your accounts.

If the above mentioned precautionary measures are taken, they can potentially turnout to be a safeguard from SIM hijacking. However, in the long run, who knows what kind of other mischievous ways of stealing the criminals are cooking up.

Hassaan Malik

Co-founder of BlockPublisher, Hassaan is a technologist at heart with a keen interest in blockchain, cryptos and traditional financial markets. Email: hassaan@blockpublisher.com, hassaanmalek@gmail.com

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