Cyber thieves charged for using SIM swapping to hack crypto accounts

A 20-year-old Ohio resident has been charged for stealing funds from victims he knew held crypto by using a “SIM swapping” scam, the Manhattan District Attorney's Office announced this week.

According to the office, Dawson Bakies successfully logged into 18 online accounts - including several cryptocurrency exchange accounts - before stealing approximately $10,000 in crypto. The indictment follows the sentencing of 20-year-old Joel Ortiz earlier this week, who was given 10 years in a California prison for stealing $5 million in crypto from 40 different victims using the same scheme.

The increasingly prevalent scam, which allows thieves to bypass two-factor authentication safeguards, involves a perpetrator persuading a mobile carrier to reroute a victim's phone number to their own SIM card. This means they can receive password-sensitive messages from the stolen number. 

“We know what you’re doing, we know how to find you, and we will hold you criminally accountable, no matter where you are," Manhattan District Attorney Vance said in a message to cyber criminals following Bakies' indictment. He also said part of the blame was on wireless phone carriers who were disregarding the dangers of loosely distributing SIMs to attract customers. 

According to the indictment, Bakies stole the phone numbers of around 50 victims who he admitted selecting for their crypto funds, in part due to the currency's relative anonymity. As such, he was also charged on several counts of identity theft.

The prosecutions are among the first in the US for SIM swapping. 

About Author

Isabel is The Block's London and European reporter. She previously reported for Reuters in Madrid and London, following on from her time as a freelance journalist for the Guardian and the New York Times. She has a Bachelors in War Studies from King’s College London and a Master of Philosophy from the University of Oxford. Conflict of Interest: Edward Woodford, the CEO of SeedCX, is Isabel's brother. She does not report on any issues related to Seed or advise other authors in any regard.