Bart Stephens, a pioneering force in the crypto industry and managing partner of Blockchain Capital, is suing an anonymous bad actor. Stephens claims he was the victim of a $6.3 million crypto hack resulting from a SIM-swap attack.
This lawsuit serves as another grim reminder of the persistent cyber threats faced by high-profile crypto advocates.
The Dreaded SIM-Swap Attack
On May 14, the hacker, known only as Jane Doe in the official complaint, orchestrated a sophisticated SIM-swap attack against Stephens. Leveraging information gleaned from the dark web and other online channels, the malefactor managed to override security protocols with Stephens’ mobile service provider. This culminated in the hacker redirecting Stephens’ cell number to a newly procured device.
This nefarious technique, known as a SIM-swap attack, isn’t new. As per the Federal Bureau of Investigations, these attacks surged in 2022. Losses to this attack vector exceeded $72 million—$4 million more than the preceding year. The crux of such an attack lies in the perpetrator deceiving cellular service agents, acquiring pivotal personal data, and then diverting a victim’s mobile number to their device.
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Following the successful SIM-swap, the hacker wasted no time. They exploited Stephens’ cell number to bypass two-factor authentication barriers, resetting account passwords for various crypto wallets. From these, the hacker brazenly transferred $6.3 million in digital assets to personal crypto repositories. An audacious message to Stephens, sent from one of his compromised accounts, even boasted of the hacker’s ability to compromise any mainland US phone number.
Stephens, whose San Francisco-based fund Blockchain Capital has backed influential crypto ventures like Worldcoin, Coinbase, and Kraken, also witnessed an earlier hack of his firm’s Twitter handle. This SIM-swap ordeal, however, posed a far graver risk.
Cyber Threats Are Everywhere
The hacker even tried to pilfer another $14 million from a cold wallet affiliated with Stephens. However, swift action from a Blockchain Capital staff member thwarted this attempt. Unfortunately, it took until the next day for Stephens’ mobile network to recognize and confirm the SIM-swap attack.
In an environment where cyber heists, especially SIM-swap attacks, are escalating, crypto holders and the general public must be vigilant. Following FBI recommendations, such as avoiding oversharing financial details online and utilizing robust multi-factor authentication methods, can help thwart such malicious endeavors.
Bart Stephens has always been a vocal advocate for cryptocurrencies. He encourages critics to delve deeper into the technology behind crypto, highlighting its profound potential. Today’s evolving cyber threats underscore the need for intensified security awareness in our increasingly digitized world.
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