Three people indicted in $400 million FTX crypto hack conspiracy

Three people indicted in $400 million FTX crypto hack conspiracy

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Three people were prosecuted for identity theft conspiracy which supposedly included the 400 million dollars hack of ftx the same day in November 2022 as those convicted cryptocurrency The Exchange filed for bankruptcy protection, court records show.

Robert Powell, the 26-year-old alleged ringleader of the SIM-swapping group that siphoned that cryptocurrency from FTX virtual wallets, was ordered released on $10,000 bail after a detention hearing Friday in federal court in Chicago. . Powell’s attorney, Gal Pissetzky, declined to comment.

The Illinois resident and the two other defendants, Carter Rohn, 24, and Emily Hernandez, 23, are charged with conspiracy to commit wire fraud and conspiracy to commit aggravated identity theft and access device fraud, in a plan that has been developed since March. 2021 through last April, and involved co-conspirators traveling to cell phone retail stores in more than 15 states.

All three were arrested last week in their respective states.

The indictment issued in the United States District Court in Washington, D.C., says the trio shared the personal identifying information of more than 50 victims, created false identification documents with the victims’ names, impersonated them, and He then accessed his victims’ “online, financial and social” accounts. media accounts for the purpose of stealing money and data.”

The scheme relied on tricking phone companies into changing the subscriber identity module of cell phone subscribers to a cell phone controlled by members of the conspiracy, according to the indictment. That, in turn, allowed the conspirators to defeat multi-factor authentication protection on victims’ accounts, giving them access to the money in those accounts.

Rohn, an Indianapolis resident, was ordered held without bond after his arrest. His detention hearing will be held later in Washington.

Hernandez, who lives in Fountain, Colorado, was released last week on $10,000 bail.

A spokeswoman for the U.S. Attorney’s Office in Washington, which is handling the case, declined to comment.

The indictment does not identify FTX by name as the primary victim of the conspiracy, but the details of the hack described in that charging document align with publicly known details about the theft from FTX, which was collapsing at the time of the attack.

A source familiar with the case confirmed that FTX was the victim named in the indictment.

Former FTX boss Sam Bankman-Fried was convicted in November 2023 on conspiracy and wire fraud charges related to the theft of $10 billion or more from clients. He is awaiting sentencing in Manhattan federal court next month.

The new indictment related to the hack says that on November 11, 2022, the same day FTX filed for bankruptcy, “Powell directed his accomplices to execute a SIM swap of a Victim employee’s cell phone account.” Company”. -1″ or FTX.

Later that same day, an unidentified co-conspirator sent Hernandez a fraudulent identification document containing personally identifiable information about an FTX employee, “but with Hernandez’s photograph, which Hernandez then used to impersonate that person.” at a wireless service provider in Texas,” the indictment says. alleges.

After gaining access to the FTX employee’s AT&T account, the co-conspirators sent Powell authentication codes that were necessary to access the cryptocurrency company’s online accounts, the indictment says.

Later, on November 11 and into the following day, “the co-conspirators transferred more than $400 million in virtual currency from [FTX’s] virtual currency walls to virtual currency wallets controlled by the co-conspirators.

The indictment says that several weeks before the FTX hack, the scheme looted $293,000 in virtual currency from one victim and, days later, stole more than $1 million in cryptocurrency from another person.

One day after the FTX hack, the conspirators stole around $590,000 in cryptocurrency from an individual’s virtual wallet.

The arrests came three months after the blockchain intelligence company Elliptical reported that 180,000 units of the Ether cryptocurrency had been dormant after being stolen in the FTX hack, but were later converted to Bitcoin in late September. Ether at that time was worth $300 million.

Elliptic reported that the method of laundering stolen cryptocurrency in an effort to hide its origin was that a Russia-linked actor was behind the FTX hack.

“Of the stolen assets that can be traced through ChipMixer, significant amounts are combined with funds from Russian-linked criminal groups, including ransomware gangs and darknet markets, before being sent to exchanges,” Elliptic said in a report from October. “This points to the involvement of a broker or other intermediary with a nexus in Russia.”

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