The U.S. Department of Justice (DOJ) has charged three individuals in connection with a SIM-swapping scam that led to the theft of over $400 million from FTX. The accused individuals, identified as Robert Powell, Emily Hernandez, and Carter Rohn, are alleged to have orchestrated the massive cybercriminal theft ring.
FTX was a prominent cryptocurrency exchange platform that offered various trading services, including spot markets, derivatives, options, volatility, and leveraged products. It was founded in 2019 by Sam Bankman-Fried and gained significant popularity, with a peak valuation of $32 billion.
However, in November 2022, the company collapsed due to a major fraud, leading to the loss of billions of dollars by customers and investors. The collapse was attributed to unauthorized transactions and misappropriation of customer funds, which ultimately led to the company filing for bankruptcy.
The platform’s swift demise and the subsequent revelations of fraud and mismanagement have significantly damaged its reputation and led to widespread mistrust among investors and the public.
According to the filing, the group of fraudsters, known as the “Powell SIM Swapping Crew,” targeted FTX and other individuals over two years. One of their major strategies has been to collect personal data from approximately 50 victims. They used this information to convince cell phone providers to transfer victims’ phone numbers to a dummy phone under their control.
This allowed the group to control users’ text messages, including multi-factor authentication codes, enabling them to gain unauthorized access to victims’ financial accounts and cryptocurrency wallets.
The legal papers don’t directly mention FTX but refer to it as “victim company-1,” confirming it as the target of a SIM-swapping scheme. The leader, Robert Powell, using the online names ‘R$’ and ‘ElSwapo1,’ apparently used authentication codes from SIM-swapping to access FTX’s crypto wallets. This happened around November 11, 2022, the same time FTX faced bankruptcy and a significant crypto theft.
The DOJ charging the individuals indicates a major step in solving the $400 million FTX heist mystery. This contradicts FTX founder Sam Bankman-Fried’s earlier idea of an inside job. Bankman-Fried, dealing with legal consequences for fraud, resigned from FTX during the bankruptcy process.
