Revelations Unveil Masterminds Behind the $400 Million Loss at FTX

Source : Photo by Mariia Shalabaieva on Unsplash

The hacking incident that befell FTX, shortly after the company filed for bankruptcy in November 2022, is beginning to see the light of day.

According to documents filed in the District Court of Washington, D.C., the term "Victim Company-1" is strongly believed to refer to FTX. This view is supported by analyses from Elliptic, a blockchain security publication, and reports from Bloomberg.

Image: Filing detailing the alleged attack reported against FTX. Source: CourtListener

The documents reveal that the $400 million hack on FTX was orchestrated by three individuals: Robert Powell, Carter Rohn, and Emily Hernandez.

They employed the SIM

exchange scheme tactic, where they stole the identities of 50 victims and convinced telecommunications service providers to transfer the victims' phone numbers to their devices. By gaining control of these numbers, the trio successfully pilfered digital assets.

On November 11 and 12, 2022, Hernandez allegedly disguised herself as an FTX employee. Powell then managed to gain access to their AT&T accounts, allowing him to access the company's accounts and "transfer over $400 million in virtual currency" from FTX's crypto wallet.

Some of the stolen funds were promptly sent to the Kraken crypto exchange shortly after the hack occurred. Nick Percoco, Kraken's Chief Security Officer, revealed the identification of involved users through the X social media platform.

In the following months, the hackers moved the funds through various bridges and blockchains in an attempt to launder the stolen crypto.

SIM swapping, or SIM exchange attacks, is a type of cyberattack that involves taking control of someone's phone number. Perpetrators seek customer support from mobile operators to transfer the number to a SIM card under their control. By controlling the SIM, hackers can bypass two-factor authentication and access various online accounts of victims, including bank accounts, social media accounts, and emails.

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