The collapse of FTX has sent shockwaves through the cryptocurrency industry. The price of bitcoin and other major digital coins have fallen sharply as problems at FTX emerged.
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Three people were indicted for an identity-theft conspiracy that allegedly included the $400 million hack from FTX on the same day in November 2022 that the doomed cryptocurrency exchange filed for bankruptcy protection, court records show.
Robert Powell, the alleged ringleader of the SIM swapping group that drained that crypto out of FTX’s virtual wallets, is due to appear in Chicago federal court later Friday for a detention hearing.
Also charged in the case are Carter Rohn, an Indianapolis resident, and Colorado resident Emily Hernandez, according to the indictment, which was issued in mid-January by a grand jury in federal court in Washington, D.C.
The three defendants are charged with conspiracy to commit wire fraud, and conspiracy to commit aggravated identity theft and access device fraud, in a scheme that ran from March 2021 to last April, and involved co-conspirators traveling to cell-phone retail stores in more than 15 states.
The indictment says the trio shared the personal identifying information of more than 50 victims, created fake identification documents in the victims’ names, impersonated them, and then accessed their victims’ “online, financial and social media accounts for the purpose of stealing money and data.”
The scheme relied on duping phone companies into swapping the Subscriber Identity Module of cell phone subscribers into a cell phone controlled by members of the conspiracy, the indictment said. That in turn allowed the conspirators to defeat the multi-factor authentication protection on the victims’ accounts, giving them access to the money in those accounts.
Powell’s attorney Gal Pissetzky declined to comment.
A spokeswoman for the U.S. Attorney’s Office in Washington, which is prosecuting the case, declined to comment.
The indictment does not identify FTX by name as the main victim of the conspiracy, but the details of the hack described in that charging document align with the details publicly known about the theft from FTX. A source familiar with the case confirmed that FTX was the victim mentioned in the indictment.
The indictment says that on Nov. 11, 2022, “Powell instructed his co-conspirators to execute a SIM swap of the cellular telephone account of an employee of Victim Company-1,” or FTX.
Later that same day, an unidentified co-conspirator sent Hernandez a fraudulent identification document containing personally identifiable information about an FTX employee, “but bearing Hernandez’s photograph, which Hernandez then used to impersonate that person at a mobile service provider in Texas,” the indictment alleges.
After gaining access to the AT&T account of the FTX employee, co-conspirators sent Powell authentication codes that were needed to access the crypto company’s online accounts, the indictment says.
Later on Nov. 11 and continuing into the next day, “co-conspirators transferred over $400 million in virtual currency from [FTX’s] virtual currency walls to virtual currency wallets controlled by the co-conspirators.
The indictment says that several weeks before the FTX hack, the scheme looted $293,000 in virtual currency from one victim, and days later stole more than $1 million in crypto from another person.
And a day after the FTX hack, the conspirators stole about $590,000 in crypto from an individual’s virtual wallet.
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