Hackers, for the most part, usually target institutional crypto investors and exchanges. But since the adoption of cryptocurrencies like Bitcoin became more mainstream, these hackers started targeting small individual investors.
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They hack random people through SIM swaps or switching a phone number from one device to another. Then, they access their crypto accounts on trading platforms like Binance and empty the accounts.
Hackers Target Small Crypto Investors
According to a Wall Street Journal (WSJ) article, one of the small investors that have suffered a hack attack is 53-year-old Rosa Maguina. Earlier this year, Ms. Maguina invested a huge part of her savings in Bitcoin. Unfortunately, she lost the funds after a hacker hijacked her phone number for just two hours. She said the incident occurred on July 5 when she was about to sleep and noticed that her phone had lost signal. By the time it was restored, an unauthorized user had changed her Binance and Coinbase passwords. They emptied her accounts of crypto valued at around $80,000 at the time.
Since the incident, the price of bitcoin has grown by over 70%. “I don’t follow it anymore. I don’t need to make this worse than what it is,” said Ms. Maguina.
These attacks have led investors to hold grudges against their cellphone companies. In response, telecom companies are looking for ways to tighten their security measures. When customers use their numbers in new phones, they undergo SIM swaps. Hackers use this method to impersonate phone users with various types of account information or personal data. They are then able to access victims’ financial or social media accounts.
This problem is what phone companies are trying to fix, and some companies have come up with solutions to reduce the risk. However, their effectiveness is still in question.
Total crypto market at $2.5 Trillion | Source: Crypto Total Market Cap from TradingView.com
AT&T, the largest telecommunications company in the world, told the Federal Communications Commission (FCC) that it assesses the risk of customers’ SIM-swap requests using data analytics tools.
Another network operator, Verizon, said that it requires customers to use a one-time passcode (OTP) when switching to another carrier. Other companies like T-Mobile and US Mobile have also set up additional security measures.
FCC Proposes Stricter Regulations
The Federal Communications Commission is also requiring wireless companies to tighten their procedures for SIM swaps. In September, the agency proposed regulations mandating the companies to verify users’ passwords or send one-time passcodes.
The rules would also require the companies to tighten procedures for changing lost or stolen passwords and restrict what data employees could divulge. However, some wireless companies are not pleased with the mandate.
CTIA, a trade association representing the wireless communications industry in the US, subsequently called for flexibility in the regulations.
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