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OCT 22, 2023

Unlocking the Dangers of SIM Swapping in Web3: Safeguarding Against Identity Theft

by Crypto Alpha, BXVb7rtP5dwgpuKWx3S1B78sdwibsPstuowsyzjpU1jE

Grasping the Complexity of SIM Swapping is Vital. As cyber attackers refine their methods, educating users is key to recognizing and resisting such deceptive tactics. In the following sections, we'll explore real-world examples of SIM swapping and its wide-ranging consequences, highlighting the need for strong security measures to combat this evolving cyber threat in Web3.


SIM swap scams pose a substantial and escalating online threat, prompting a stern warning from the FBI in November 2022. The Federal Bureau of Investigation highlighted the severity of the issue, emphasizing that in the preceding year alone, victims had incurred staggering losses, estimated at over $68 million due to SIM swap scams. This type of cybercrime involves malevolent actors manipulating cellular service providers into transferring a victim's mobile service to a SIM card under the scammer's control. The primary objective behind SIM swapping is often to exploit two-factor authentication (2FA), gaining fraudulent access to critical accounts such as banking, thereby enabling unauthorized transactions and financial theft. The alarming prevalence and financial impact of SIM swap scams underscore the urgency for individuals to remain vigilant and adopt robust security measures to protect themselves against this sophisticated form of identity theft.

How does SIM swap scam work?

To understand how a SIM swap scam works, let's understand what a SIM card is.
A SIM card, short for subscriber identity module, is a tiny chip-containing card crucial for your smartphone's functionality. Inserted into your device, it enables you to make calls and send texts. Inside your phone's SIM card lies essential information, granting you the authorization to make calls and send messages. Without it, your smartphone's functionality would be limited to tasks like web access through mobile data, making phone calls, and sending and receiving text messages either from an individual or an organization.

The Mechanics of SIM Swapping (Scam/Fraud)

The sophisticated mechanics of SIM swapping delve into the realm of social engineering, exploiting vulnerabilities in the processes of mobile carriers. At its core, SIM swapping is a deceptive tactic where attackers convince a mobile carrier to transfer the victim's phone number to a new SIM card under the attacker's control (Sim Swapping can also be carried out by an individual with no intentions of fraud). This seemingly innocuous transfer grants the malicious actor unprecedented access to the victim's digital life, including sensitive accounts tied to that phone number.
The process often begins with the attacker gathering information about the target, such as their name, phone number, and potentially additional personal details. Armed with this information, the attacker contacts the victim's mobile carrier, posing as the account owner. Through a combination of persuasive communication and manipulation of customer service representatives, the attacker aims to convince the carrier to reassign the victim's phone number to a new SIM card.
Once successful, the victim's phone loses its connectivity as the number is now associated with the new SIM card in the possession of the attacker. This surreptitious switch grants the attacker control over incoming calls, text messages, and any other form of communication tied to that phone number. In the context of cryptocurrency security, this can be especially detrimental as many exchanges and wallets use phone-based authentication methods, making the victim's digital assets vulnerable to unauthorized access.

How it works?

To execute a SIM swap attack, scammers must adeptly impersonate the victim and persuade their mobile carrier to shift the mobile service to an alternative SIM card. Typically, they assert that the original SIM card is lost, stolen, or damaged, substantiating their claim with sensitive personal information as a form of "proof" of identity.
These crucial details may be acquired through various means, such as purchasing them from data brokers, extracting them from data breaches accessible on the dark web, or pilfering them using spyware. Another tactic for gathering information involves a form of phishing, where hackers send SMS messages or emails, posing as reputable companies.
To carry out a SIM swap attack, a hacker may initially engage in phishing to acquire personal information. According to a 2020 study by Princeton University, the social engineering tactics employed to deceive cellular service providers highlight the critical nature of certain details:
  1. Financial Information: This includes details about the credit card associated with the account, such as the last four digits, activation date, last payment, and particularly the CVC (card verification code) on the back.
  2. Device Details: The IMEI (International Mobile Equipment Identity), which is the unique serial number of your device, or the ICCID (Integrated Circuit Card Identifier), the unique serial number of your SIM card.
  3. Personal Data: Information like your billing address, full name, date of birth, or even just your email address.
  4. Call Logs: Details about recently dialed numbers, dates of calls, or the identities of call recipients.
  5. Account Credentials: Confidential authentication elements such as PINs, passwords, and answers to security questions.
  6. One-time Passcodes (OTPs): These are items that only you should possess and are another factor in two-factor authentication.
Following a successful SIM swap, the scammer gains access to accounts utilizing your phone as a second factor in two-factor authentication (2FA). While this verification method is typically secure, a compromised phone number allows the SIM swapper to receive account password reset codes on their device, potentially locking you out of social, banking, and other online accounts.
Image: Tiaxa YouTube Page
Image: Tiaxa YouTube Page

Signs that you're the victim of a SIM swap attack

Recognizing signs of a SIM swap attack is crucial for minimizing its impact.
Here are key indicators to be aware of:
  1. Loss of Connectivity: The inability to make calls, send texts, or use mobile data indicates a potential issue with your network connection. It may be a simple outage or a sign of a SIM card swap transferring your service to another individual.
  2. Activity Notifications Elsewhere: Services often alert users to unusual account activity. If you receive emails about suspicious actions on your accounts, it may signify an ongoing SIM swap attack. Additionally, your cell carrier might send a confirmation message if your phone number is activated on a new device.
  3. Account Access Issues: SIM card hackers commonly start by locking you out of your accounts through password changes. Some platforms automatically block access after numerous questionable login attempts. Losing access is a clear indication of a compromise, and immediate action is necessary to secure your accounts.
  4. Unauthorized Transactions: The ultimate goal of a SIM swap attack is often financial gain. Notifications about transactions you didn't initiate may signal a SIM swap. In such cases, disputing unauthorized charges and securing financial accounts is crucial, alongside regaining control of your phone number promptly.

What to do if you're the victim of a SIM swap scam

If you suspect you've fallen victim to a SIM swap scam, take swift action to prevent further compromise. Follow these steps to regain control of your financial accounts and mobile carrier service:
  1. Contact Your Cell Provider: Reach out to your cellular service provider immediately upon suspecting a SIM swap. While catching the culprit may be challenging, your provider can terminate their access to your mobile network, putting an end to their scheme.
  2. Secure Your Financial Accounts: Immediately inform your bank about the situation. Their support team will guide you in safeguarding your finances. Freeze your accounts to block all transactions until you are certain of their security. If unauthorized transactions occur, initiate the dispute process to explore cancellation or refund options.
  3. Disable 2FA and Change Passwords: Take precautions until you're confident the SIM swap scammer has no access to your calls and texts. Log in to your accounts, disable 2FA in your settings, and choose a new, robust password.
  4. Upon restoring control of your cell service to a SIM card you manage, re-enable 2FA. Ensure all account security features and notifications are activated to detect and prevent future SIM swap attacks and other potential hacks.
Image: Freepik
Image: Freepik

How can you prevent SIM swap scams?

To shield yourself from SIM swap fraud, adopt these specific preventative measures, in addition to general online safety practices:
  1. Modify Online Behavior: Simjacking scammers often cyberstalk their targets before striking. Refrain from posting personal information like your address, phone number, full name, and birth date. Exercise caution when sharing details known only to you.
  2. Avoid Responding to Requests for Personal Info: Legitimate institutions never solicit your private details through calls, emails, or texts. Be wary of scammers posing as service providers, banks, or government entities. SIM hackers commonly use SMS messages to extract information or initiate malware attacks.
  3. Enhance Account Security: Strengthen your app and account security by leveraging biometric authentication, such as Face ID, as a robust 2FA factor. Explore reliable password managers to maintain unique and complex passwords. Some carriers offer SIM-specific measures, like T-Mobile’s SIM protection.
  4. Utilize PIN Codes: Change your phone’s default SIM PIN by manually setting a PIN or password through your phone’s settings. Many carriers provide Number Transfer PINS that activate during a SIM change request, requiring the hacker to possess your PIN.
  5. Build IDs Without Your Phone Number: Consider hardware authentication factors from companies like Yubikey that aren't tied to your SIM card or phone number. Instead of receiving a text or call, press a button on the device for verification, enhancing security.
  6. Set Up Alerts with Banks and Mobile Carriers: Request notification emails or text messages to alert you to any changes in your bank or cell carrier accounts. This serves as an early-warning system, aiding in the detection and prevention of SIM-swapping attacks and other fraudulent activities.
  7. Go Phoneless: For sensitive accounts, link them to a no-contract or temporary phone (burner) or consider not linking them to a phone at all. While it may entail some inconvenience, the peace of mind in protection against SIM swapping and scams is invaluable.
  8. Authentication Apps: Opt for authentication through apps like Google Authenticator and Authy, which cannot be transferred to other devices. These apps are further secured by a PIN or biometric factor, making it challenging for hackers to exploit even if you lose a phone with the authenticator app.
Image: Freepik
Image: Freepik

What Does This Have to Do with Crypto?

Experiencing a SIM swap can be a significant disruption, especially given our reliance on mobile phones. However, the implications go beyond inconvenience; they extend to potential financial risks, particularly if you use two-factor authentication (2FA) for your cryptocurrency accounts such as Binance account, Bybit account, and any other cryptocurrency-related platforms.
If a malicious actor gains access to your cryptocurrency account credentials—username and password—they may encounter a hurdle if you've implemented additional security layers, such as 2FA. This method typically involves receiving a code via text message, email, or phone call to verify a login attempt. The trouble arises if the hacker takes control of your phone, enabling them to alter your email password and block your receipt of 2FA alerts. Subsequently, they can request 2FA codes to be sent to their device, now receiving communications intended for your number, granting them access to your accounts. This gives them the window to swiftly transfer your funds, potentially engaging in further obfuscation techniques like coin mixing. Even after regaining control of your phone, bad actors might have added additional devices to your 2FA, leaving your cryptocurrency account susceptible to ongoing threats.

Final Thoughts

The prevalence of SIM swap scams poses a significant online risk, with cybercriminals exploiting vulnerabilities in mobile carrier systems to gain unauthorized access to victims' phone numbers. This nefarious practice, often starting with the gradual harvesting of personal information, can lead to substantial financial losses and compromise the security of sensitive accounts, including those tied to cryptocurrencies. The FBI's warning in November 2022, citing an estimated $68 million lost to SIM swap scams in the preceding year, underscores the urgency of addressing this growing threat.
To fortify one's defenses against SIM swap attacks, a multi-layered approach is essential. Utilizing security applications like Avast One or Norton, which offer comprehensive protection against malware, phishing attempts, and fraudulent websites, is a crucial step. Additionally, employing robust two-factor authentication apps such as Authy or Google Authenticator, secure password management tools like LastPass or Dashlane, and mobile security solutions like Lookout contribute to a holistic defense strategy. As the digital landscape evolves, staying vigilant and adopting proactive measures are paramount in safeguarding personal information and financial assets from the perils of SIM swap fraud.
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