SIM Swapping a Growing Threat for Crypto Owners

Nicholas J. Percoco, chief security officer at Kraken, warns cryptocurrency holders to protect their data and use a more secure form of 2FA.

Cryptocurrency owners are facing a growing threat through SIM swap attacks. The chief security officer at Kraken, Nicholas J. Percoco, warned that the attacks were becoming a trend, especially threatening for US-based customers.

In a long thread, he explained that efforts to steal identities and exploit accounts has accelerated and may be the work of an organized group:

Usually, exchange users will resort to 2FA using SMS, meaning control over the SIM card would allow anyone to access the funds. An account without 2FA is also vulnerable, so Percoco advises the use of non-SMS based 2FA.

SIM swapping was noted as a threat back in 2018, receiving a special note from authorities, as Cryptovest reported. SIM swapping was relatively rare, affecting only separate users before the trend picked up in May.

For now, mostly the users of US-based mobile operators are complaining. It turns out a part of the process involves a form of identity theft and misrepresentation, as hackers visit offices and receive a new card based only on the knowledge of a mobile phone.

The trend also picked up once Bitcoin (BTC) moved near and above $8,000, becoming more valuable and attractive to steal.

In May, the US Department of Justice charged nine individuals with identity theft and SIM swapping, linking them to a hacker group called “The Community”. The group of hackers, aged 19 to 28, impersonated their targets and took control of their accounts.

“Mobile phones today are not only a means of communication but also a means of identification,” stated United States Attorney Matthew Schneider.  “This case should serve as a reminder to all of us to protect our personal and financial information from those who seek to steal it.”

The hacker group reportedly stole digital assets worth more than $2.4 million.

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