$400M FTX Hack Linked to SIM Swap Ring as DOJ Cracks Down

The fraudulent SIM-swapping trio impersonated a victim organization’s employee, which is alleged to be FTX.

DOJ eagle flying from a digital space with hackers sim cards.
Created by Kornelija Poderskytė from DailyCoin
  • SIM-swapping attacks have recently emerged as an infamous technique among industry threat actors.
  • The US Department of Justice has identified individuals associated with the FTX hack.
  • The DOJ detailed that the indicted actors orchestrated a SIM-swapping attack.

Industry threat actors have become relentless in their attacks, causing significant losses for crypto entities and investors. The 2022 implosion of cryptocurrency exchange FTX coincided with a cyberattack, which siphoned off hundreds of millions in funds and assets. Following the breach, the United States Department of Justice (DOJ) launched a probe to identify the responsible actors.

While initial suspicions suggested the involvement of former CEO Sam Bankman-Fried (SBF) and the likelihood of an insider hack, recent findings by the DOJ office point to the contrary.

FTX Hack Mystery Solved?

In a filing to the US District Court for the Northern District of Illinois, U.S federal prosecutors charged perpetrators Robert Powell, Emily Hernandez, and Carter Rohn for orchestrating SIM-swapping attacks, an infamous technique used to obtain personal data and facilitate the transfer of cell phone numbers via service providers.

United States district court for the district of Columbia document.

The attacks, which ran for over two years, allegedly affected over 50 victims, one of which is alleged to be the now-defunct exchange FTX.

While the filing did not explicitly name a connection to the exchange, the details of the attack on the victim organization resembled the November FTX attack, prompting speculation of the exchange as the victim in question.

Was FTX SIM Swapped?

As part of the filing details, the attack against the alleged Victim Company-1 occurred on November 11, 2022, in which one of the SIM swapping trio, Emily Hernandez, utilized a fraudulent identification document to impersonate an employee at the victim organization.

This granted the group access to the firm’s accounts and enabled the transfer of over $400 million in crypto assets to their personal accounts.

Blockchain cybersecurity firm Elliptic drew parallels of the details to the November 2022 attack on FTX,  which also occurred on November 11 and drained an estimated $477 million from several of the exchange’s wallets. 

Bloomberg also asserted that the exchange in question is indeed FTX, citing anonymous sources. 

On the Flipside

  • On December 9, the US Securities and Exchange Commission fell victim to a SIM swap attack, which granted an unauthorized third party access to the commission’s official X account.
  • While the DOJ’s indictment has shifted accusations from SBF, the disgraced crypto mogul is still guilty of other charges, including user funds misappropriation and wire fraud.
  • FTX remains indebted, with over $8 billion worth of assets to an extensive list of creditors.

Why This Matters

The indictment of the SIM-swapping conspirators introduces a layer of clarity to the long-standing mystery surrounding the cyberattack that exacerbated the FTX fallout and marks a significant step toward enforcing justice and accountability.

Find out more about Sim Swap attacks and how to prevent them: 
How to Prevent a SIM Swap Attack as SEC Falls Prey

Read here to find out more about Tether USDT’s 2023 performance:
Tether Profits at All-Time High, USDT Reserves Hit $5.4B 

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Grace Abidemi

Grace Abidemi, a cryptocurrency reporter at DailyCoin, covers industry developments and trends. She previously worked as a freelance writer. With a Bachelor's degree in German Language and certifications in marketing and storytelling, Grace creates engaging content. When not working, she's in Nigeria, mastering cooking and canvas painting, and enjoys learning about different cultures and languages.