Trio Indicted for $400 Million FTX Cryptocurrency Hack Linked to Identity Theft Conspiracy

In a significant development, three individuals have been indicted for an elaborate identity theft conspiracy, allegedly including the notorious $400 million hack from FTX cryptocurrency exchange on the same day it filed for bankruptcy protection in November 2022, according to court records.

Robert Powell, the alleged mastermind behind the SIM-card swapping group responsible for siphoning cryptocurrency from FTX's virtual wallets, is set to appear in a Chicago federal court for a detention hearing. The indictment, issued in mid-January by a federal grand jury in Washington, D.C., also charges Carter Rohn from Indianapolis and Emily Hernandez from Colorado.

The trio faces charges of conspiracy to commit wire fraud, conspiracy to commit aggravated identity theft, and access device fraud. The scheme, running from March 2021 to last April, involved the co-conspirators traveling to cellphone retail stores in over 15 states. Their modus operandi included sharing personal information of more than 50 victims, creating fake identification documents, and impersonating victims to access online, financial, and social media accounts with the aim of stealing money and data.

The indictment reveals the group's reliance on duping phone companies into swapping Subscriber Identity Modules (SIM) of cellphone subscribers. By gaining control of a cellphone through this manipulation, the conspirators could circumvent multifactor authentication protections on victims' accounts, granting them access to funds within.

Although the indictment doesn't explicitly name FTX, a source familiar with the case confirmed that the cryptocurrency exchange was the primary victim of the conspiracy. FTX faced a tumultuous time as it collapsed amid the cyberattack. Notably, the former FTX Chief, Sam Bankman-Fried, was convicted in November 2023 on charges related to stealing over $10 billion from customers and is awaiting sentencing in Manhattan federal court next month. The case underlines the persistent threat of identity theft and cybercrime within the cryptocurrency space.