What makes crypto attractive to hackers is their anonymity and untraceability, and hence, crypto is no stranger to hacks and scams. This has forced people to adopt more security measures as hackers are getting more sophisticated. Usually, criminals make a good amount of money while getting away without any prosecution. Recently, two instances of SIM swapping were prosecuted in the United States by the local government. The ease of porting a SIM along with the general lack of awareness are said to be the main culprits.
SIM swapping
The process of SIM swapping usually involves gaining access to somebody’s cellular traffic. Swapping is simple enough that most people with the right knowledge can do it. Unlike other hacking methods like installing malware or cloning a device, SIM swapping is relatively simple. It usually involves a few phone calls. The vulnerability that these scammers use is the fact that cellular companies have made it easy for customers to port their networks. This involves a few phone calls where the companies try to check the identity of the caller. In reality, basic information about someone is all it takes to swap a SIM. Once this is done scammers can easily gain access to almost all accounts bypassing the two-factor authentication. There is really little one can do against such attacks, and this is what worries the authorities the most.
Prosecution
In the biggest SIM swapping case yet, 20-year-old Joel Ortiz stole $7.5 million in crypto assets. SIM swapping is gaining traction among scammers given the relative ease at which it can be executed. The accused, Joel Ortiz, has pleaded guilty, said Erin West, the Deputy District Attorney of Santa Clara County, California. The plea will see Ortiz spend 10 years in jail and plead guilty for theft. Ortiz’s scheme was elaborate and in the end, he was able to scam 40 people. The story was first reported in Motherboard, a division of the news outlet VICE on February 1st and has since been picked by other outlets. Authorities reportedly stated that Ortiz is the first individual convicted for the crime of SIM swapping. Samy Tarazi, an agent who investigated Ortiz was quoted, “We think justice has been served. And hopefully, this is a strong message to that community”. Prosecutors in Santa Clara announced the jail sentence on April 22nd.
Joel Ortiz
One of the interesting facts about the case is Joel Ortiz himself, the young criminal had a lavish life paid for by the money he stole. According to reports, Ortiz spent a whopping $10,000 a time at Los Angeles nightclubs. Something even more bizarre, he hired a helicopter in which he and his friends flew into a music festival. To top it off, Ortiz spent money from his heist buying top-end Gucci clothes and other luxury goods. According to the prosecutors, Ortiz is a “prolific SIM swapper who targeted victims to steal cryptocurrency and to take over social media accounts with the goal of selling them for Bitcoin(BTC).” When Ortiz was finally apprehended at the Los Angeles International Airport last year, only $400,000 of the stolen funds were recovered according to investigators. The rest is believed to be hidden or spent as Ortiz has not revealed anything about it.
As members of the crypto community, it brings great delight to many that such acts are brought to justice and criminals are prosecuted. This is in stark contrast to how things were a few years back when there were no ways to resolve such issues. In fact, many joked that losing crypto is like shooting a pile of cash to the moon. This seems to be a step in the right direction as the industry matures. For wider adoption, adequate protection from law enforcement is expected, as both investor and retail customers will want some for a resolution to disputes and theft. But what many worry is if it will turn into a Pandora’s box, whereby, in the name of safety, the whole industry will be brought under the scrutiny of the government, defeating the very idea of crypto.
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