We are now usually using our mobile phone numbers as the extra step to take in order to be sure that our online security is as high as it can get, but for the folks in the virtual currency investments world their mobile phone number is the exact opposite – it’s their biggest security weakness.
As Forbes has reported, hackers are able to identify Bitcoin (and other virtual currency) users and investors, find out their telecommunications provider, and then convince a customer service agent of the said provider to transfer the number to a provider and device that is under the control of the hacker themselves. And as most virtual currency wallets ask you to enter your number for the two-factor authentication, this means that once the hacker gains control over your number, they also have the control of your wallets. They just need to port a number to their own device and change the password to the person’s virtual currency.
According to a report made by The New York Times, this new scam is making Bitcoin investors lose millions.
People have been coming forward and telling their stories about the new scam. Joby Weeks, who is a Bitcoin entrepreneur, told the times that once the hackers found their way to get his mobile phone number, he lost close to a million dollars in virtual currency. Weeks also said the digital heist came after he asked his phone company to add extra layers of security. According to Weeks, everybody he knows in the cryptocurrency world has gotten their phone number stolen.
What’s even more frustrating is that virtual currency transactions are irreversible, which means that victims get no recourse. This is the difference between virtual and traditional currency because traditional financial institutions can reverse the malicious transactions if caught in time.
The number of phone hijackings has been steadily rising over the years, says the report by the Times, citing the data collected by the Federal Trade Commission. In January 2013, there were 1,038 reported phone number hijackings reported; by January 2016, there were 2,658.
One of the most popular Bitcoin wallets, Coinbase, is now advising its customers to disconnect their phone numbers from the accounts as the response to the rising number of hijackings.
Richard Young, a Verizon spokesman, told the Times these types of identity thefts are still fairly uncommon.