The US authorities have arrested a 20-year old college student from Boston accused of stealing millions of dollars’ worth of digital currency by hacking into the victims’ phones.
According to court documents obtained by Motherboard, Joel Ortiz and a few unnamed accomplices allegedly hacked over 40 phone numbers belonging to crypto traders and investors. The criminal group stole more than $5 million in Bitcoin (BTC) and other virtual currencies.
“This is the first reported case against someone who allegedly used the increasingly popular technique known as SIM swapping or SIM hijacking to steal bitcoin, other cryptocurrencies, and social media accounts,” the court documents read.
The elaborate scheme involves replacing the victim’s phone number with a SIM accessible to the criminals, thus providing access to sensitive information, such as the users’ two-factor authentication (2FA) codes. The criminals are then able to log into the victim’s crypto accounts, change their passwords and steal their funds.
Authorities believe this technique was used during the Consensus Conference held in New York in May, when over $1.5 million in cryptocurrency was reportedly stolen. The court papers also noted that Ortiz had been involved in a number of other attacks reported in February and March 2018.
One of the hacked crypto owners was quoted by Motherboard as saying that he had lost more than $1 million in one of the SIM-hacking incidents. In another case, Ortiz allegedly hacked a tech executive’s phone and texted his daughter: “TELL YOUR DAD TO GIVE US BITCOIN”.
Investigators have served warrants on the cryptocurrency exchanges used by Ortiz, including Coinbase, Bittrex and Binance. The information provided showed Ortiz had moved more than $1 million worth of various cryptocurrencies through those platforms. The authorities have so far seized $250,000 in digital money from Ortiz, but said they are unaware where the rest of the stolen funds are being stored.
Ortiz was arrested on July 12 at Los Angeles International Airport where he was about to board a plane to Europe. His arrest came just one day after 28 charges had been filed against him. These include 2 counts of grand theft, 13 counts of identity theft and fraud, and 13 counts of exploitative hacking. Ortiz is currently in jail awaiting his plea hearing on August 9. His bail was set at $1 million.