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New D.C. court filings from January 24 revealed that three people have been charged with stealing more than $400 million worth of digital currency from FTX in a November 2022 FTX SIM-swapping attack.
A Years-long FTX SIM Swap Scheme
Robert Powell, Carter Rohn, and Emily Hernandez have all been charged with conspiracy to commit wire fraud and conspiracy to commit aggravated identity theft for a years-long FTX SIM swapping scheme lasting from March 2021 to April 2023.
SIM swap attacks occur when fraudsters trick a victim’s cell phone carrier by reassigning a phone number from one device to another, allowing perpetrators to bypass multi-factor authentication and providing them access to vulnerable personal data.
Prosecutors argue the trio’s goal was “to unjustly enrich themselves by targeting victims for SIM swaps, creating fraudulent identification documents in victim names, performing SIM swaps in exchange for money, accessing and stealing victims’ money and data, and concealing the source of the ill-gotten money through multiple concealment techniques.”
Unveiling “Victim Company-1”
The indictment alleges that the “co-conspirators transferred over $400 million in virtual currency” on or about November 11, 2022, from a corporation labeled as “Victim Company-1” to virtual wallets under their control.
According to a newly released Bloomberg report, two sources familiar with the matter confirmed that FTX is indeed “Victim Company-1.”
FTX formally filed for Chapter 11 bankruptcy on November 11, 2022, after allegations swirled that the company had misappropriated customer funds. The crypto exchange’s disgraced founder, Sam Bankman-Fried, was found guilty on seven different counts of fraud in November 2022 and is facing what could amount to a life sentence in prison.
Nearly $70 Million Stolen in FTX SIM Swap Attacks in 2021 Alone
Have three US citizens just been implicated in the $477 million FTX heist?https://t.co/H7odNzlk5H
— Elliptic (@elliptic) February 1, 2024
According to recent statistics from the Federal Bureau of Investigation (FBI), the FBI Internet Crime Complaint Center received over 1,600 complaints of SIM swap attacks constituting more than $68 million of adjusted losses.
“It is not clear whether the three indicted individuals are alleged to have been involved in the theft of the crypto assets and their subsequent laundering, or only in facilitating the initial access to the victim company’s online accounts,” British blockchain analytics firm Elliptic stated in a recent blog post. “It is therefore not clear whether any of the stolen assets are under their control, and might be recovered.”
News of the indictment came just one day after the bankrupt crypto exchange committed to ensuring full repayment for FTX customers.
Bankman-Fried is currently scheduled to be sentenced in Manhattan federal court on March 28. FTX and Alameda Research executives charged in the crypto exchange’s collapse are expected to be sentenced at a later date.