Two Americans Jailed for Stealing $330,000 in Crypto by ‘Sim-Swapping’

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Two Americans Jailed for Stealing $330,000 in Crypto by ‘Sim-Swapping’​

Source: AdobeStock / Iurii Gagarin

Two men from Massachusetts, USA, were sentenced last week for what's been described as "an extensive scheme" to take over victims’ social media accounts and steal some $330,000 in cryptocurrency using SIM swapping and computer hacking, among other methods.

The US Department of Justice (DoJ) announced that, on October 19, twenty-four-year-old Eric Meiggs, got sentenced to two years and one day, while twenty-two-year-old Declan Harrington was sentenced to two years and seven days in prison.

The case was investigated by the FBI’s Boston Field Office, with assistance from IRS Criminal Investigations.

The announcement cited court documents, per which the two men specifically targeted executives of crypto companies, but also other people "who likely had significant amounts of cryptocurrency." Further targets included those who had high value or “OG” social media account names.

No specific cryptocurrencies have been named in the announcement.

According to the DoJ,

"Meiggs and Harrington conspired to hack into and take control over these victims’ online accounts so they could obtain things of value, such as cryptocurrency. They used an illegal practice known as “SIM-swapping” and other techniques to access, take control of, and in some cases steal cryptocurrency from, the accounts."

There are at least 10 identified victims around the country, which were targeted by the duo.

"Members of the conspiracy allegedly stole approximately $330,000 in cryptocurrency from these victims. Meiggs allegedly took control of two victims’ “OG” accounts with social media companies."

SIM swapping works like this: cybercriminals contact a victim’s cell phone carrier and convince them to reassign the victim’s cell phone number from the SIM card which is inside the victim’s phone to another SIM card - the one inside a phone controlled by the criminals.

These individuals then pretend to be their victims and ask online account providers to send account password-reset links or an authentication code to the SIM-swapped device that they now control. Once they complete this step, they can reset the victims' account log-in credentials and use them to access the victims' accounts without authorization - meaning they hacked into their victims' accounts.

From here on out, the victims are locked out of their accounts, which are now fully controlled by the attackers.

Lawyer Robert Freund told Business Insider that if a victim has two-factor authentication (2FA) enabled via SMS confirmation, "then the fraudsters can satisfy the authentication challenges because they will receive the SMS codes sent to the victim's number."

Lawyer Omar Ochoa, added that,

"Telecommunications companies may be liable for SIM swapping. All companies that gather and retain private information, have a duty to protect your data."

In February 2022, the FBI said that from January 2018 to December 2020, it received 320 complaints related to SIM swapping incidents with adjusted losses of approximately $12 million. However, it received 1,611 SIM swapping reports last year alone with adjusted losses of more than $68 million.

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