Theft is bad; this is a lesson we’re all taught at an early age, but for one 21-year-old man from Boston, that lesson is coming a little too late.
Crypto Thief Will Face Jail Time
That man is Joel Ortiz, a former high school valedictorian. He’s now been sentenced to ten years in prison by a Santa Clara (California) judge for his role in stealing millions in crypto funds from a Silicon Valley entrepreneur. It is estimated that Ortiz took nearly $8 million in digital assets from a total of 40 people. Ortiz pled no contest to ten separate felony theft charges last January and was sentenced on April 19.
Ortiz stole the money through a process called SIM swapping. This occurs when a hacker gains access to a user’s phone or SIM card. From there, they’re able to download information about that person including usernames and passwords for various online accounts. They are then able to take over the person’s phone and call their accounts to see about initiating password changes, thereby giving themselves full access and locking out the original users. The hacker can also bypass most forms of security by providing the user’s social security number (SSN).
Last May, Ortiz reportedly stole more than $5 million in just a matter of minutes from an entrepreneur and cryptocurrency business owner in the California town of Cupertino. He then spent the money on lavish luxuries including a helicopter ride for himself and some friends to a music festival. He also purchased Gucci luggage and clothing and spent over $10,000 a night at one point in various nightclubs throughout Los Angeles.
At the time of his arrest, only $400,000 of the funds had not been spent. The rest are gone and cannot be given back to the victims.
Prosecutor Erin West says of Ortiz and other cryptocurrency thieves:
These are not Robin Hoods. These are crooks who use a computer instead of a gun. The are not just stealing some ethereal, experimental currency. They are stealing college funds, home mortgages and people’s financial lives.
This Looks Familiar
Cyberattacks and thievery in the crypto space can be relatively common. Among the two largest crypto thefts to occur in the past five years include Mt. Gox and Coincheck, both of which are situated in Japan. Mt. Gox occurred in February of 2014. More than $400 million in bitcoin funds were stolen from users, much of which hasn’t been returned or recovered.
Coincheck occurred nearly four years later in January 2018. Coincheck was considerably larger than Mt. Gox, resulting in more than half-a-billion dollars’ worth of crypto vanishing overnight. The event sparked the presence of Japan’s Financial Services Agency (FSA) to step in and take over regulating the crypto space in the country.