The U.S. Department of Justice announced this week that two Massachusetts men have been jailed for allegedly seizing social media accounts and stealing cryptocurrency holdings through an illegal technique known as "SIM-swapping."
On Wednesday, Eric Meiggs, 24, and his accomplice Declan Harrington, 22, were both sentenced to prison terms of two years and one day for SIM-swapping, computer hacking and other illegal tactics.
The two men reportedly stole approximately $330,000 in cryptocurrency.
According to court documents, Meiggs and Harrington targeted executives of cryptocurrency companies and others who were likely to possess significant amounts of crypto, along with "high value" or "OG" statuses (as in "original gangster") with social media account names.
At least 10 people in America were part of Meiggs and Harrington's apparent "scheme," according to the DOJ press statement.
According to Business Insider, SIM-swapping involves the practice of a fraudster gaining remote access to a cellphone number — which is routinely used to authenticate logins to banking, email and social media accounts.
Insider reports the FBI received more than 1,600 SIM-swapping reports last year — more than three times the number for 2018-2020 combined.
"If a victim has two-factor authentication for those services 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 Robert Freund told Insider.
Another attorney, Omar Ochoa, revealed that "telecommunications companies may be liable for SIM-swapping. All companies that gather and retain private information, have a duty to protect your data.
"Your phone provider should have robust identity verification procedures to ensure it's actually talking to the customer. If the procedures are too lax, customer service representatives are not well trained, or representatives ignore procedures, you have a good basis for arguing that your phone provider is at fault for the SIM swap," added Ochoa.
When speaking to Insider, Freund recommended that potentially vulnerable cryptocurrency owners contact their cell network and activate or request all available account security features.
Insider reports that AT&T, T-Mobile and Verizon offer additional PIN codes for customers attempting to transfer or port their cellphone number.
"This makes it less likely that a fraudster could successfully impersonate you to your carrier," said Freund.
Suspected victims of SIM-swapping should contact their network immediately, reset passwords, notify their banks and credit card companies, and contact police, according to Freund and Ochoa.
"The sooner you act, the better your chances of limiting the damage," added Freund.
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