$1M in Crypto Disappears after SIM Swapping by US Hacker

The alleged perpetrator, Nicholas Truglia, stole $1 million in cryptocurrency from a San Francisco resident and also gained illegal access to the phones of several Silicon Valley executives.

California authorities have indicted New York citizen Nicholas Truglia on 21 felony charges of cryptocurrency hacks, including the theft of $1 million in virtual coins. The defendant used the so-called SIM swapping trick to gain illegal access to digital asset accounts, as reported on Tuesday.

The Santa Clara County District Attorney Office, which handles prosecutions in California’s sixth most populous area, suspects Truglia of 11 SIM swapping attacks. One of the victims, San Francisco resident Robert Ross, lost $1 million in savings for his two daughters’ college education. Ross was storing the sum in US dollars in two crypto exchanges, Coinbase and Gemini. On October 26, he found that his phone had lost signal and after contacting Apple store’s staff and mobile operator AT&T, the victim alerted REACT - a special task force for tech crimes in the Bay Area. However, the squad was unable to prevent the theft as Truglia had already converted the two deposits into virtual currencies.

According to Erin West, the deputy district attorney of Santa Clara County, the main pros and cons in investigating crypto-related hacks come from the blockchain technology. Although it tracks all transactions, senders and receivers of the coins remain anonymous.

“In some ways, it’s helpful because we can see where the money is going — that’s the beauty of the blockchain. It’s public, but what we still can’t see is who holds those accounts,” West told CNBC on Wednesday.

REACT investigators and Secret Service agents obtained a court warrant and searched Truglia’s apartment in Manhattan, recovering around $300,000 of Ross’ funds from a computer hard drive.

The REACT team also found that Truglia had hacked the phones of several Silicon Valley executives but had been unable to steal their crypto assets. Some of those victims are Saswata Basu, the CEO of DLT storage service 0Chain; Myles Danielson, a hedge fund executive; and Gabrielle Katsnelson, co-founder of SMEs securities marketplace SMBX.

Santa Clara County prosecutors expect Truglia’s case to go to court in December after his extradition from New York to California.

SIM swapping has become a major tactic for stealing digital coins. The hack happens when a perpetrator gains access to a mobile phone carrier and transfers the victim’s phone number to another SIM card. This operation gives the hacker control of the text message system used by many crypto exchanges in the so-called two-factor identification.

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