Three Individuals Charged in $400 Million FTX Cryptocurrency Theft

Table of Contents

• SIM swap attack reveals ongoing risks
• Background on FTX collapse
• Signs of an inside job?

SIM swap attack reveals ongoing risks

Three individuals have been charged in connection with stealing over $400 million in digital currency from crypto exchange FTX through a SIM-swapping attack last November, according to a [newly released Bloomberg report](https://www.bloomberg.com/news/articles/2024-02-01/ftx-s-missing-400-million-stolen-in-sim-swapping-hack-doj-says).

The three have been charged with conspiracy to commit wire fraud and conspiracy to commit aggravated identity theft, stemming from a SIM swap scheme that ran from March 2021 to April 2023. In a SIM swap attack, fraudsters reassign a victim’s phone number to a new device, circumventing multi-factor authentication controls to access personal data.

The indictment alleges that the accused aimed to enrich themselves through SIM swaps, creating fake identification documents, stealing funds and data, and concealing their fraudulent gains. FTX, referred to as “Victim Company-1” in the indictment, filed for Chapter 11 bankruptcy protection on November 11, 2022 after accusations of misusing customer funds.

Background on FTX collapse

FTX’s founder Sam Bankman-Fried was convicted of fraud in November 2022 and [ faces a potential life sentence](https://www.courtlistener.com/docket/68192231/1/united-states-v-powell/). In 2021, there were over 1,600 complaints about SIM swap attacks to the FBI, with losses totaling more than $68 million, according to [statistics from the Federal Bureau of Investigation](https://www.ic3.gov/Media/Y2022/PSA220208).

The specifics of the three indicted individuals’ involvement in asset theft and laundering are still unclear, as is whether any stolen assets can still be recovered. FTX pledged full repayment to its customers just one day before the indictment news surfaced. Sam Bankman-Fried is set to be sentenced on March 28, while other executives involved in FTX’s collapse will be sentenced later.

Signs of an inside job?

[British blockchain analytics firm Elliptic](https://www.elliptic.co/blog/three-individuals-implicated-in-the-477-million-ftx-heist) points out that the scale and precision of the theft indicates possible insider knowledge of FTX infrastructure. [Have three US citizens just been implicated in the $477 million FTX heist?](https://t.co/H7odNzlk5H) tweets @elliptic.

While authorities have started to unravel the details behind FTX’s downfall, many questions remain about the full scope of illegal activities and potential recoveries for defrauded customers. SIM swap attacks continue to pose an ongoing threat, highlighting the need for strengthened security practices across the crypto industry.

As investigations into the FTX collapse move forward, more charges and arrests are likely in the coming months.

The post Three Individuals Charged in $400 Million FTX Cryptocurrency Theft appeared first on Althalla.