LUCKNOW (CoinChapter.com) — The cryptocurrency landscape has fallen victim to a surging wave of security breaches, specifically SIM swap attack, causing losses that have surpassed an alarming rate within a few months.
SIM Swap Attacks Scare Crypto Sector
Instances of crypto hacks related to Web3 and DeFi platforms have dwindled in the first half of 2023.
Notably, a concerning trend has emerged in the form of SIM swap attacks. On-chain investigator ZachXBT has revealed that the financial damage caused by SIM swap attacks in the last four months has exceeded $13.3 million.
The underbelly of this crisis lies in the vulnerability of victims who rely solely on SMS two-factor authentication (2FA) to safeguard their accounts.
Hackers control a victim’s phone number, access sensitive accounts, and siphon off funds. A common tactic involves scammers creating a false sense of urgency with claims of draining user assets.
As digital assets surge in value, crypto holders have become prime targets for these attacks.
Unmasking the Prevalence of SIM Swap Attacks
In 2022, the Federal Bureau of Investigation warned about the increasing SIM-swap attacks.
These attacks specifically target individuals believed to have significant cryptocurrency holdings. According to the FBI’s assessment, these attacks led to a theft of $72 million in 2022 versus $68 million in the year prior.
While SIM swap attacks are not new, they have intensified. These attacks are affecting regular mobile carriers like T-Mobile, Verizon, and AT&T, as well as the crypto sector. Investors have experienced substantial losses.
In May 2023, Blockchain Capital’s Founder, Bart Stephens, lost $6.3 million in digital assets. Even high-profile projects like the Gutter Cat Gang NFT project suffered losses exceeding $765,000 due to a SIM swap attack.
Global Response and Call to Action
In response to the growing menace of SIM swap attacks, the US Federal Communications Commission (FCC) proposed new rules to safeguard consumers from these “ugly new frauds.”
Additionally, law enforcement agencies have escalated their efforts to apprehend and prosecute hackers involved in SIM swap attacks. A British hacker, AKA PlugwalkJoe, was sentenced to a five-year prison term in the United States for orchestrating a SIM swap attack that resulted in a $794,000 crypto loss.
In light of these alarming developments, crypto users are advised to take proactive measures to fortify the security of their assets.
Relying solely on phone numbers for 2FA is no longer sufficient. Experts suggest using alternatives like authenticator apps or security keys. These methods provide a stronger layer of protection against the constant threat of SIM swap attacks.