A recent SIM-swap hack that compromised crypto influencer Ben Armstrong’s Twitter account highlights the dangers centralized social media poses to the industry’s reputation.
The attacker used Armstrong’s account to lure a million dollars’ worth of investments in a fake crypto token.
BitBoy Fraud Tapped Anti-SEC Sentiment
Armstrong (alias BitBoy) accused Verizon of the hack and threatened to sue the firm. He advised followers not to click on links asking for money.
SIM-swap fraud occurs when a hacker gains access to a victim’s online account by stealing their phone number. It is one of several common methods other than phishing that attackers use to steal crypto.
In many cases, attackers ensnare victims through claimed celebrity affiliations. They also use emotive language inherent to a political or social cause.
In this case, the attacker appeared to target critics of the US Securities and Exchange Commission’s (SEC) recent crackdown on crypto.
On June 6, the SEC sued the largest US crypto exchange Coinbase for depriving investors of protection by offering them unregistered securities.
Before that, the SEC sued the largest global exchange Binance and its CEO Changpeng Zhao for commingling customer and corporate funds. Both crackdowns galvanized the crypto industry, creating a ripe narrative for attackers to exploit.
Accordingly, the hacker called the fake token offered on Armstrong’s account “anti-SEC.” Armstrong said the same entity hacked pro-crypto lawyer John Deaton’s Twitter account last week.
Deaton is known for his advocacy against the SEC’s inconsistent application of US securities laws.
Decentralized Platforms Offer Superior Identity Protection
Since SIM-swap attacks spoof a victim’s identity, decentralized platforms could offer influencers better immunity from identity theft. They can help influencers shape their characters through immutable self-descriptions and commentary.
Followers can also view the entity’s credentials and trading activity to verify their claims.
Recently, Tools for Humanity announced a concerted push into decentralized identities with its retina-scanning orb. The company stores the person’s identity on the Worldcoin blockchain.
Cardano’s cryptographically-secured digital identity gives users full control over their data.