Sim Swap: How Hackers Use Your Number to Steal Cryptos

There are a lot of things that you want to consider if you ever want to buy cryptocurrencies. Not only are you going to worry about the potential scams that you might encounter when investing in a token, you also have to worry about hackers.

Hackers can victimize both individual investors and even exchanges. In fact, Japan made the necessary changes in its regulations mainly because of crypto exchanges that are vulnerable to hackers. After what happened to Coincheck, Japanese regulators took action by releasing new guidelines that these exchanges need to meet.

But things are a bit scarier these days. Do you know that you could lose your crypto investment if hackers found out about your number? Recently, Plaintiff Michael Terpin filed a case against AT&T saying there was negligence on the part of the company. It was even likened to a “hotel giving a thief with fake ID a room key and a key to the room safe to steal the jewelry in the safe from the rightful owner”.

Unfortunately, he isn’t the only one who suffered from this type of hacking incident. According to CoinDesk’s 2018 State of Blockchain Report, cryptocurrency lost by investors hit $1.6 billion by the end of June.

Sim Swap

How exactly does it work? According to Aaron Higbee who works as chief technology officer and co-founder of anti-phishing company Cofense, “Data is being bought, sold and traded on the dark web”. He also mentioned that “If your phone number is of a sufficient age, you’re on a database somewhere”.

Once criminals are able to hack into your email or your crypto account, they then deal with the “two-factor identification” that sends text code to the phone number. Though it was primarily designed to stop unauthorized log in, once the hacker controls your number by performing what’s called a sim swap, then your email or worse your private keys are vulnerable to attacks”.

Offline Storage

For those who are paranoid and for those who are quite familiar with the possible dangers of keeping their private keys online, there are those who prefer to have what is known as “cold storage”. What this means is that you can store your digital currency offline.

According to Abra CEO Bill Harhydt, because of the possible threats of hackers, the company prefer to do it this way. He mentioned that storing private keys online is considered the “worst idea in the history of bad ideas”.

So why do people keep their cryptos online? You could actually be a frequent trader or who is a first0time investor who just bought Bitcoin around December when the cryptocurrency almost hit $20,000.

He also mentioned that “your phone number right now is a lot more important than your social security number”. He added that “The average consumer doesn’t pay attention to security until they ‘ve been hacked”.

So who exactly is responsible in case a cryptocurrency account is hacked primarily because of a phone number? Is it the customer’s fault? Is it the crypto exchange? Or should the telecommunications company be blamed for this problem?