- Two Missouri men have been arrested in connection with the September 22nd Crowd Machine Wallet
- The theft was carried out through ‘SIM card Swapping’
- Over 1 Billion CMCT tokens were stolen
On the 22nd of September, the Crowd Machine Wallet was compromised and the perpetrators were able to withdraw more than 1 billion CMCT tokens which were worth $14 million. As a result of this theft, the value of CMCT dropped by over 87%. The alleged perpetrators have now been apprehended. Two hackers by the name of Fletcher Childers, 23, and Joseph Harris, 21, were arrested in Oklahoma City in late September.
Details of the theft
Childers and Harris are both residents of Missouri and carried out the theft using a process called SIM card swapping.
SIM card swapping involves tricking the mobile service provider to hand over control of the mobile number in order to gain access to the two-factor identification that was attached to the Crowd Machine Wallet Administration.
“The criminal investigation is ongoing so we’re not in a position to comment other than to confirm that two arrests have been made,” Crowd Machine Founder and CEO Craig Sproule told News 4 in a message Friday evening. “We’ve been working closely with law enforcement agencies to help with the ongoing investigation.”
The attack was apparently conducted in a hotel room the perpetrators had rented. After the funds were stolen, they were then traded on various exchanges. Though it is unconfirmed for now, the trades likely took place on Bittrex and IDEX.
This is because trade volumes matching the amount that was stolen were recorded on those platforms.
Childers has since been released, though his release conditions are still unknown. Harris, on the other hand, is still in police custody.
Theft and fraud exist in all parts of the financial world. From credit card fraud to the hacking of bank accounts, threats exist to stored funds all the time.
Cryptocurrency crime is unique in the sense that it is easier to track than other crimes. While the SIM swapping scheme exposes a possible vulnerability, the swiftness with which the transaction could be traced on the various exchanges lead to a swift arrest.
This incident could lead to tighter security measures being taken to secure crypto wallets in the future.