Over the past weekend, approximately $45 million in Bitcoin and Bitcoin Cash was reportedly stolen via a SIM-card attack. Josh Jones, the founder of Dreamhost, was apparently the victim of the attack.
According to Dovey Wan, a founding member of Primitive Ventures, roughly $30 million in Bitcoin Cash and $15 million in Bitcoin make up the combined $45 million in stolen crypto.
What is a SIM-card attack?
Also known as SIM swapping, a SIM-card attack is when a criminal tricks a service provider into transferring an existing user’s phone number to a SIM card in their possession. After a successful transfer, the scammer can reset access to the victim’s accounts and passwords. Unfortunately, phone number verification is the easiest way to reset password. This is by far the easiest way for criminals to gain access to private accounts without having to bypass the biometric security of a smartphone.
Hot Wallets vs. Cold Storage
There are many options when it comes to crypto storage. Unfortunately for Josh, he used a hot wallet to store his digital assets. This type of attack could have been easily avoided had his crypto been put into cold storage. In theory, hot wallets do offer a great amount of convenience to crypto holders in terms of making quick transactions. However, due to their reliance on an active internet connection, this makes them easily hackable. On the other hand, cold storage leaves the keys to your crypto offline and in your complete control. The CoolWallet S from CoolBitX is a great hardware wallet that offers both the security of cold storage and the convenience of a hot wallet in one package.
