Blockchain Capital founder allegedly loses crypto worth $6.3 million in SIM swap attack

Bart Stephens, the cofounder of Blockchain Capital, lost $6.3 million worth of crypto in an alleged SIM swap hack. 

Stephens filed a lawsuit against the anonymous team of hackers on Aug. 16, 2023. The identities of the perpetrators are not yet known, according to a court filing obtained by Blockworks. 

The hacks took place from May 12 to May 14 of this year, per the filing. The hackers impersonated Stephens’ brother, Brad, which allowed them to gain access to one of his accounts. They then bought a Nokia phone through Stephens’ account and carried out the SIM swap by resetting his passwords and passing two-factor authentication prompts.

The filing also revealed that the hackers messaged Stephens from his own account, telling him that they could “remotely hack anyone’s phone number in the mainland US.” They also offered Stephens a deadline to contact them via Whatsapp.

Finally, the hackers drained Stephens’ account on May 14, transferring approximately $6.3 million worth of bitcoin (BTC), ether (ETH), maker (MKR), compound (COMP), uniswap (UNI) among other tokens to wallets under their control. 

The hackers also tried to jack 80 BTC and 6,500 ETH from Stephens’ custodial cold wallet, but this failed because an employee at Blockchain Capital received an email notification that alerted them to the withdrawal attempts. 

This was when Stephens first became aware that his various accounts were being attacked.

The filing also showed evidence of the hackers funneling their ill-gotten gains through decentralized exchanges to make them harder to trace. Two such exchanges were mentioned in the filing, but they were redacted.    

Stephens is predictably seeking compensation for his lost assets and the time and money spent on investigating the hack. He is also demanding a jury trial, should the hackers be found.

The alleged exploit of Stephens’ crypto accounts is reminiscent of the mid-2017 hack of crypto investor Michael Terpin — though he lost quite a bit more.

Terpin parted ways with $24 million in digital assets, but instead of going after the attackers, he sued AT&T, his cellular provider. The court found in favor of AT&T before the case went to trial.

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