Cryptocurrency

The Latest Scams: Extortion by Impersonation and SIM Swaps

December 13, 2018

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The Latest Scams: Extortion by Impersonation and SIM Swaps

If there’s one unfortunate group that’s early to cryptocurrency, its scammers. There are a number of tactics they employ to steal or demand payments in digital currencies from victims. The best defense against any of them is limiting how much personal information you reveal online. This both limits the attention you draw and the ability of the criminal to even employ their tactics. Here are some of their latest tricks so you stay ahead of the curve.

One tactic involves a SIM card swapping scam where criminals directly interact with a telecommunications company while passively robbing you. Claims have been filed in court against these companies for allowing “criminals to arrange for a telecoms company to reassign a user’s account to another SIM, allowing full access to all calls, messages and notifications” and access to “cryptocurrency wallets and two-factor authentication codes.” These swaps were due to “‘a persuasive plea for assistance, a willing telecommunications carrier representative, and an electronic impersonation of the victim.’”

In fact, U.S. entrepreneur and cryptocurrency investor Michael Terpin, who lost $23.8 million to this scam, is seeking $200 million in punitive damages against AT&T.






Another recent tactic involves impersonating individuals on social media familiar to a target and then attempting to extort them by damaging their reputation with libelous accusations. This is a relatively new phenomenon in the criminal scamming world. They will spread comments on social media with false material crafted to seem legitimate, for instance by impersonating individuals close to the criminal’s target, and will demand cryptocurrencies in order to stop the posts. Many will pay the ransom but, unfortunately, this may only entice the criminals more. It is best to reach out to proper authorities and support of the social media platform to report the account.

Speaking with CNBC, Google’s email security lead Mark Risher talks about these scammers in this digital currency age.

“It could just be a case of mistaken identity or guilt by association. They could be using someone who seems to be low value to pivot toward somebody considered a higher value target, like somebody political in nature,” he told CNBC. “Or maybe they saw that you were discussing Bitcoin on a public message board.”

Risher goes on to describe how bragging about bitcoin or other cryptocurrency holdings online could be the spark to scammers targeting you. As he describes, the litany of personal information online allows them to attack you in ways that personally pertain to you.

Those who are known for their wealth, whether digital or fiat, are unfortunately constant targets and victims of these criminal schemes. For the rest of us, we should work to clean up our digital trail and limit it going forward. Always consult the proper authorities if you have fallen victim to an attack or know someone who has.