In a dramatic turn of events in the crypto realm, Bart Stephens, the driving force behind Blockchain Capital and a pioneering figure in cryptocurrency advocacy, has ignited legal flames against an enigmatic hacker responsible for pilfering a staggering $6.3 million in diverse digital currencies straight out of Stephens’ cyber coffers.
Painting a digital picture in the court, Stephens narrates a sinister tale. This faceless marauder, going by the placeholder ‘Jane Doe’, cunningly harnessed data sprinkled both in plain sight and the shadowy corners of the dark web. Exploiting these, the hacker smoothly sidestepped security barriers of Stephens’ mobile service provider, commandeering his account this past May. The plot thickens as the infiltrator requisitioned a new handset, transferring Stephens’ coveted personal number to their new device—a strategy detailed in papers presented to the U.S. District Court for Northern California on August 16.
This crafty maneuver? Dubbed the “SIM-swap attack.” In a prescient warning, the FBI, just a year prior, had flagged the rising frequency of such assaults, especially zeroing in on individuals with sizable cryptocurrency reserves. The bureau’s data points to a worrying trend—a leap from $68 million pilfered in 2021 to a concerning $72 million the following year.
Tracing back, the Stephens brothers, Bart and Brad, breathed life into Blockchain Capital in 2013. From its San Francisco base, the fund threw its weight behind promising ventures like Worldcoin, Coinbase, Kraken, and the buzz-worthy NFT marketplace, Opensea. A blip appeared on the radar when Blockchain Capital’s Twitter was compromised, as reported by Cointelegraph.
The lawsuit paints a vivid image: Post the SIM-swap, the hacker tapped into Stephens’ phone to reset digital vault credentials and sail through double authentication layers. In a brazen act, a day before whisking away the hefty $6.3 million, they tauntingly penned a message, gloating about their unparalleled hacking prowess.
Their avarice didn’t end there. Another audacious attempt to snatch a cool $14 million was halted, thanks to an alert Blockchain Capital staff member. It was this very incident that unveiled the looming threat to Stephens.
May 15 turned out to be the day of reckoning—Stephens’ mobile service provider validated the SIM-swap allegation, albeit a tad late. Roughly half of the stolen stash found its way to crypto mixers, known to muddy transactional waters, making the task of tracing pilfered funds akin to finding a needle in a haystack.
Digging deeper into the mechanics of a SIM-swap, one encounters a sinister dance of deceit. Hackers sweet-talk or, in jargon, “social engineer” mobile network representatives into spilling sensitive client details. With this knowledge in tow, they effortlessly swap the victim’s number onto their device.
Drawing parallels, in a jaw-dropping incident, Nicholas Truglia of Florida faced an 18-month incarceration for pilfering a mind-boggling $20 million, counting Michael Terpin of Transform Ventures as one of the victims.
As a beacon for the crypto cause, Stephens has frequently jousted with detractors, notably JP Morgan’s Jamie Dimon. Stephens once retorted to Dimon’s skepticism on CNBC in 2017, urging naysayers to delve deep before discarding bitcoin as mere smoke and mirrors.
