Threats to the crypto industry’s security come in many forms, as cybercriminals constantly experiment with novel approaches. The risks that crypto investors face are increasing in tandem with the market’s rising popularity.
While statistics suggest a decrease in Web3 and DeFi platform crypto breaches in the first half of 2023, SIM swap attacks have grown in popularity. On-chain investigator ZachXBT claims that the total amount lost to SIM swap assaults over the previous four months is now 8 digits.
The on-chain crypto investigator went to social media site X (previously Twitter) to break the news about the staggering amount of cryptocurrency that has been lost through SIM swap assaults in recent times. Over $13.3 million worth of cryptocurrency has been stolen via 54 SIM swap frauds in only four months.
The fact that the vast majority of victims rely only on SMS two-factor authentication (2FA) makes these assaults all the more effective. However, this is no longer sufficient since hackers have progressed to more advanced hacking techniques.
Cybercriminals are aware that cryptocurrency traders often store large sums of money in digital wallets protected by little more than a mobile phone number. Scammers try to trick users into thinking their accounts have been attacked so they may steal their money.
The most vulnerable mobile service providers in recent years have been T-Mobile, Verizon, and AT&T, and SIM switch assaults are not a new kind of breach. An investor lost $6.3 million in digital assets due to a recent increase in assaults on the cryptocurrency industry.
In May of this year, hackers stole $6.3 million worth of digital assets after gaining access to Blockchain Capital founder Bart Stephens’ personal phone number. The Gutter Cat Gang NFT project also experienced a SIM swap assault, which led to the transfer of NFTs worth about $765,000 in total.
The US Federal Communications Commission proposed new restrictions earlier this year to safeguard customers against SIM swaps, which they referred to as “ugly new frauds.” There have also been more severe crackdowns, such as the sentencing of a British hacker known by his online handle, AKA PlugwalkJoe, to five years in jail in the United States for his role in a SIM swap attack that resulted in a $794,000 loss in crypto.
The use of an authenticator app or security key to safeguard accounts is recommended for crypto users since it is more secure than using a phone number for 2FA.
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