The activities of an unscrupulous hacker had taken the cryptocurrency account of a Silicon Valley executive in a death roll when he syphoned $1million from the victim Robert Ross through his phone number which he hacked to gain access. The hacker had taken over the phones of several other Silicon Valley executives but was unable to rob their accounts.
The silicon valley executive who resides in San Francisco noticed the loss of network service signal on his phone on the 26th of October; he then decided to reach to his service provider, AT&T about the problem. Unknown to him that his phone had been hacked, the hacker swooped $500,000 from two separate accounts that he had with Coinbase and Gemini, as revealed by Santa Clara officials.
Erin West the deputy district attorney of Santa Clara County while speaking with CNBC said;
“It’s a whole new wave of crime, it’s a new way of stealing of money: They target people that they believe to have cryptocurrency.”
The hacker has been charged with 21 accounts, which include identity theft fraud, embezzlement, pattern crimes that “involve a pattern of related felony conduct”, and attempted grand theft in Ross’ case, according to court documents.
The district attorney had revealed that the victim had saved that money for his daughters’ college funds storing it in U.S dollars on two cryptocurrencies and then move them into his own account before Ross was able to gain control of his phone number.
After obtaining a search warrant, Truglia’s 42nd high-rise in Manhattan was searched last week by officials who were able to recover $300,000 from a computer hard drive, with the rest of the money still being tracked down despite its challenges.
Speaking about the benefits of the blockchain, West told CNBC that in some ways, it’s helpful because people can see where the money is doing that’s the beauty of blockchain.
She said even though blockchain is public what people can’t see is who hold those accounts.
Last year when cryptocurrency trading of leading digital token Bitcoin spiked to a high price of $20,000 because of a huge number of retail investors, the crypto community also suffered the huge increase of cryptocurrency hacks.
CoinDesk in its 2018 State of Blockchain Report cited that individuals lost $1.6 billion in total at the end of June.
Other victims whose phones were hacked include Saswata Basu, the CEO of blockchain storage service 0chain; Myles Danielson, a hedge-fund executive, and Gabrielle Katsnelson, co-founder of start-up SMBX.
Santa Clara officials are expected to arrest the criminal in December after he agreed to extradition, then a court date will be set for his trial as revealed by officials.
Not The First Phone-Swapping Scheme
This case was just another number in a plethora of phone hacking cases. A Californian man sued AT&T for $224 million this summer after hackers used his phone number to drain $24 million worth of cryptocurrency stored on a cryptocurrency exchange.
The victim Michael Terpin accused AT$T of negligence in that case, describing the situation as a hotel giving a thief with a fake ID room key and the key to the room safe to steal jewellery in the safe from the rightful owner.
The hackers exploitative tactic allows them to hack into a person’s cryptocurrency account from their own device after getting pieces of private information like a birthday or a social security number. This information will then be utilised to answer security questions from the online cryptocurrency store.
To curtail the trend, experts have advised investors to guard their cell phone numbers and store their digital currency offline in what is known as “Cold Storage”, to make it harder for fraudsters to hack them.