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Federal prosecutors in Los Angeles this week unsealed criminal charges against five men alleged to be members of a hacking group responsible for dozens of cyber intrusions at major U.S. technology companies between 2021 and 2023, including LastPass, MailChimp, Okta, T-Mobile and Twilio.
A visual depiction of the attacks by the SMS phishing group known as Scattered Spider, and Oktapus. Image: Amitai Cohen twitter.com/amitaico.
The five men, aged 20 to 25, are allegedly members of a hacking conspiracy dubbed “Scattered Spider” and “Oktapus,” which specialized in SMS-based phishing attacks that tricked employees at tech firms into entering their credentials and one-time passcodes at phishing websites.
The targeted SMS scams asked employees to click a link and log in at a website that mimicked their employer’s Okta authentication page. Some SMS phishing messages told employees their VPN credentials were expiring and needed to be changed; other phishing messages advised employees about changes to their upcoming work schedule.
These attacks leveraged newly-registered domains that often included the name of the targeted company, such as twilio-help[.]com and ouryahoo-okta[.]com. The phishing websites were normally kept online for just one or two hours at a time, meaning they were often yanked offline before they could be flagged by anti-phishing and security services.
The phishing kits used for these campaigns featured a hidden Telegram instant message bot that forwarded any submitted credentials in real-time. The bot allowed the attackers to use the phished username, password and one-time code to log in as that employee at the real employer website.
In August 2022, multiple security firms gained access to the server that was receiving data from that Telegram bot, which on several occasions leaked the Telegram ID and handle of its developer, who used the nickname “Joeleoli.”
The Telegram username “Joeleoli” can be seen sandwiched between data submitted by people who knew it was a phish, and data phished from actual victims. Click to enlarge.
That Joeleoli moniker registered on the cybercrime forum OGusers in 2018 with the email address joelebruh@gmail.com, which also was used to register accounts at several websites for a Joel Evans from North Carolina. Indeed, prosecutors say Joeleoli’s real name is Joel Martin Evans, and he is a 25-year-old from Jacksonville, North Carolina.
One of Scattered Spider’s first big victims in its 2022 SMS phishing spree was Twilio, a company that provides services for making and receiving text messages and phone calls. The group then used their access to Twilio to attack at least 163 of its customers. According to prosecutors, the group mainly sought to steal cryptocurrency from victim companies and their employees.
“The defendants allegedly preyed on unsuspecting victims in this phishing scheme and used their personal information as a gateway to steal millions in their cryptocurrency accounts,” said Akil Davis, the assistant director in charge of the FBI’s Los Angeles field office.
Many of the hacking group’s phishing domains were registered through the registrar NameCheap, and FBI investigators said records obtained from NameCheap showed the person who managed those phishing websites did so from an Internet address in Scotland. The feds then obtained records from Virgin Media, which showed the address was leased for several months to Tyler Buchanan, a 22-year-old from Dundee, Scotland.
A Scattered Spider phishing lure sent to Twilio employees.
As first reported here in June, Buchanan was arrested in Spain as he tried to board a flight bound for Italy. The Spanish police told local media that Buchanan, who allegedly went by the alias “Tylerb,” at one time possessed Bitcoins worth $27 million.
The government says much of Tylerb’s cryptocurrency wealth was the result of successful SIM-swapping attacks, wherein crooks transfer the target’s phone number to a device they control and intercept any text messages or phone calls sent to the victim — including one-time passcodes for authentication, or password reset links sent via SMS.
According to several SIM-swapping channels on Telegram where Tylerb was known to frequent, rival SIM-swappers hired thugs to invade his home in February 2023. Those accounts state that the intruders assaulted Tylerb’s mother in the home invasion, and that they threatened to burn him with a blowtorch if he didn’t give up the keys to his cryptocurrency wallets. Tylerb was reputed to have fled the United Kingdom after that assault.
A still frame from a video released by the Spanish national police, showing Tyler Buchanan being taken into custody at the airport.
Prosecutors allege Tylerb worked closely on SIM-swapping attacks with Noah Michael Urban, another alleged Scattered Spider member from Palm Coast, Fla. who went by the handles “Sosa,” “Elijah,” and “Kingbob.”
Sosa was known to be a top member of the broader cybercriminal community online known as “The Com,” wherein hackers boast loudly about high-profile exploits and hacks that almost invariably begin with social engineering — tricking people over the phone, email or SMS into giving away credentials that allow remote access to corporate networks.
In January 2024, KrebsOnSecurity broke the news that Urban had been arrested in Florida in connection with multiple SIM-swapping attacks. That story noted that Sosa’s alter ego Kingbob routinely targeted people in the recording industry to steal and share “grails,” a slang term used to describe unreleased music recordings from popular artists.
FBI investigators identified a fourth alleged member of the conspiracy – Ahmed Hossam Eldin Elbadawy, 23, of College Station, Texas — after he used a portion of cryptocurrency funds stolen from a victim company to pay for an account used to register phishing domains.
The indictment unsealed Wednesday alleges Elbadawy controlled a number of cryptocurrency accounts used to receive stolen funds, along with another Texas man — Evans Onyeaka Osiebo, 20, of Dallas.
Members of Scattered Spider are reputed to have been involved in a September 2023 ransomware attack against the MGM Resorts hotel chain that quickly brought multiple MGM casinos to a standstill. In September 2024, KrebsOnSecurity reported that a 17-year-old from the United Kingdom was arrested last year by U.K. police as part of an FBI investigation into the MGM hack.
Evans, Elbadawy, Osiebo and Urban were all charged with one count of conspiracy to commit wire fraud, one count of conspiracy, and one count of aggravated identity theft. Buchanan, who is named as an indicted co-conspirator, was charged with conspiracy to commit wire fraud, conspiracy, wire fraud, and aggravated identity theft.
A Justice Department press release states that if convicted, each defendant would face a statutory maximum sentence of 20 years in federal prison for conspiracy to commit wire fraud, up to five years in federal prison for the conspiracy count, and a mandatory two-year consecutive prison sentence for aggravated identity theft. Buchanan would face up to 20 years in prison for the wire fraud count as well.
Further reading:
A cyberattack that shut down two of the top casinos in Las Vegas last year quickly became one of the most riveting security stories of 2023. It was the first known case of native English-speaking hackers in the United States and Britain teaming up with ransomware gangs based in Russia. But that made-for-Hollywood narrative has eclipsed a far more hideous trend: Many of these young, Western cybercriminals are also members of fast-growing online groups that exist solely to bully, stalk, harass and extort vulnerable teens into physically harming themselves and others.
Image: Shutterstock.
In September 2023, a Russian ransomware group known as ALPHV/Black Cat claimed credit for an intrusion at the MGM Resorts hotel chain that quickly brought MGM’s casinos in Las Vegas to a standstill. While MGM was still trying to evict the intruders from its systems, an individual who claimed to have firsthand knowledge of the hack contacted multiple media outlets to offer interviews about how it all went down.
One account of the hack came from a 17-year-old in the United Kingdom, who told reporters the intrusion began when one of the English-speaking hackers phoned a tech support person at MGM and tricked them into resetting the password for an employee account.
The security firm CrowdStrike dubbed the group “Scattered Spider,” a recognition that the MGM hackers came from different cliques scattered across an ocean of Telegram and Discord servers dedicated to financially-oriented cybercrime.
Collectively, this archipelago of crime-focused chat communities is known as “The Com,” and it functions as a kind of distributed cybercriminal social network that facilitates instant collaboration.
But mostly, The Com is a place where cybercriminals go to boast about their exploits and standing within the community, or to knock others down a peg or two. Top Com members are constantly sniping over who pulled off the most impressive heists, or who has accumulated the biggest pile of stolen virtual currencies.
And as often as they extort victim companies for financial gain, members of The Com are trying to wrest stolen money from their cybercriminal rivals — often in ways that spill over into physical violence in the real world.
CrowdStrike would go on to produce and sell Scattered Spider action figures, and it featured a life-sized Scattered Spider sculpture at this year’s RSA Security Conference in San Francisco.
But marketing security products and services based on specific cybercriminal groups can be tricky, particularly if it turns out that robbing and extorting victims is by no means the most abhorrent activity those groups engage in on a daily basis.
KrebsOnSecurity examined the Telegram user ID number of the account that offered media interviews about the MGM hack — which corresponds to the screen name “@Holy” — and found the same account was used across a number of cybercrime channels that are entirely focused on extorting young people into harming themselves or others, and recording the harm on video.
Holy was known to possess multiple prized Telegram usernames, including @bomb, @halo, and @cute, as well as one of the highest-priced Telegram usernames ever put up for sale: @nazi.
In one post on a Telegram channel dedicated to youth extortion, this same user can be seen asking if anyone knows the current Telegram handles for several core members of 764, an extremist group known for victimizing children through coordinated online campaigns of extortion, doxing, swatting and harassment.
People affiliated with harm groups like 764 will often recruit new members by lurking on gaming platforms, social media sites and mobile applications that are popular with young people, including Discord, Minecraft, Roblox, Steam, Telegram, and Twitch.
“This type of offence usually starts with a direct message through gaming platforms and can move to more private chatrooms on other virtual platforms, typically one with video enabled features, where the conversation quickly becomes sexualized or violent,” warns a recent alert from the Royal Canadian Mounted Police (RCMP) about the rise of sextortion groups on social media channels.
“One of the tactics being used by these actors is sextortion, however, they are not using it to extract money or for sexual gratification,” the RCMP continued. “Instead they use it to further manipulate and control victims to produce more harmful and violent content as part of their ideological objectives and radicalization pathway.”
The 764 network is among the most populated harm communities, but there are plenty more. Some of the largest such known groups include CVLT, Court, Kaskar, Leak Society, 7997, 8884, 2992, 6996, 555, Slit Town, 545, 404, NMK, 303, and H3ll.
In March, a consortium of reporters from Wired, Der Spiegel, Recorder and The Washington Post examined millions of messages across more than 50 Discord and Telegram chat groups.
“The abuse perpetrated by members of com groups is extreme,” Wired’s Ali Winston wrote. “They have coerced children into sexual abuse or self-harm, causing them to deeply lacerate their bodies to carve ‘cutsigns’ of an abuser’s online alias into their skin.” The story continues:
“Victims have flushed their heads in toilets, attacked their siblings, killed their pets, and in some extreme instances, attempted or died by suicide. Court records from the United States and European nations reveal participants in this network have also been accused of robberies, in-person sexual abuse of minors, kidnapping, weapons violations, swatting, and murder.”
“Some members of the network extort children for sexual pleasure, some for power and control. Some do it merely for the kick that comes from manipulation. Others sell the explicit CSAM content produced by extortion on the dark web.”
KrebsOnSecurity has learned Holy is the 17-year-old who was arrested in July 2024 by the U.K.’s West Midlands Police as part of a joint investigation with the FBI into the MGM hack.
Early in their cybercriminal career (as a 15-year-old), @Holy went by the handle “Vsphere,” and was a proud member of the LAPSUS$ cybercrime group. Throughout 2022, LAPSUS$ would hack and social engineer their way into some of the world’s biggest technology companies, including EA Games, Microsoft, NVIDIA, Okta, Samsung, and T-Mobile.
Another timely example of the overlap between harm communities and top members of The Com can be found in a group of criminals who recently stole obscene amounts of customer records from users of the cloud data provider Snowflake.
At the end of 2023, malicious hackers figured out that many major companies have uploaded massive amounts of valuable and sensitive customer data to Snowflake servers, all the while protecting those Snowflake accounts with little more than a username and password (no multi-factor authentication required). The group then searched darknet markets for stolen Snowflake account credentials, and began raiding the data storage repositories used by some of the world’s largest corporations.
Among those that had data exposed in Snowflake was AT&T, which disclosed in July that cybercriminals had stolen personal information and phone and text message records for roughly 110 million people — nearly all its customers.
A report on the extortion group from the incident response firm Mandiant notes that Snowflake victim companies were privately approached by the hackers, who demanded a ransom in exchange for a promise not to sell or leak the stolen data. All told, more than 160 organizations were extorted, including TicketMaster, Lending Tree, Advance Auto Parts and Neiman Marcus.
On May 2, 2024, a user by the name “Judische” claimed on the fraud-focused Telegram channel Star Chat that they had hacked Santander Bank, one of the first known Snowflake victims. Judische would repeat that claim in Star Chat on May 13 — the day before Santander publicly disclosed a data breach — and would periodically blurt out the names of other Snowflake victims before their data even went up for sale on the cybercrime forums.
A careful review of Judische’s account history and postings on Telegram shows this user is more widely known under the nickname “Waifu,” an early moniker that corresponds to one of the more accomplished SIM-swappers in The Com over the years.
In a SIM-swapping attack, the fraudsters will phish or purchase credentials for mobile phone company employees, and use those credentials to redirect a target’s mobile calls and text messages to a device the attackers control.
Several channels on Telegram maintain a frequently updated leaderboard of the 100 richest SIM-swappers, as well as the hacker handles associated with specific cybercrime groups (Waifu is ranked #24). That leaderboard has long included Waifu on a roster of hackers for a group that called itself “Beige.”
Beige members were implicated in two stories published here in 2020. The first was an August 2020 piece called Voice Phishers Targeting Corporate VPNs, which warned that the COVID-19 epidemic had brought a wave of voice phishing or “vishing” attacks that targeted work-from-home employees via their mobile devices, and tricked many of those people into giving up credentials needed to access their employer’s network remotely.
Beige group members also have claimed credit for a breach at the domain registrar GoDaddy. In November 2020, intruders thought to be associated with the Beige Group tricked a GoDaddy employee into installing malicious software, and with that access they were able to redirect the web and email traffic for multiple cryptocurrency trading platforms.
The Telegram channels that Judische and his related accounts frequented over the years show this user divides their time between posting in SIM-swapping and cybercrime cashout channels, and harassing and stalking others in harm communities like Leak Society and Court.
Mandiant has attributed the Snowflake compromises to a group it calls “UNC5537,” with members based in North America and Turkey. KrebsOnSecurity has learned Judische is a 26-year-old software engineer in Ontario, Canada.
Sources close to the investigation into the Snowflake incident tell KrebsOnSecurity the UNC5537 member in Turkey is John Erin Binns, an elusive American man indicted by the U.S. Department of Justice (DOJ) for a 2021 breach at T-Mobile that exposed the personal information of at least 76.6 million customers.
Binns is currently in custody in a Turkish prison and fighting his extradition. Meanwhile, he has been suing almost every federal agency and agent that contributed investigative resources to his case.
In June 2024, a Mandiant employee told Bloomberg that UNC5537 members have made death threats against cybersecurity experts investigating the hackers, and that in one case the group used artificial intelligence to create fake nude photos of a researcher to harass them.
In June 2024, two American men pleaded guilty to hacking into a U.S. Drug Enforcement Agency (DEA) online portal that tapped into 16 different federal law enforcement databases. Sagar “Weep” Singh, a 20-year-old from Rhode Island, and Nicholas “Convict” Ceraolo, 25, of Queens, NY, were both active in SIM-swapping communities.
Singh and Ceraolo hacked into a number of foreign police department email accounts, and used them to make phony “emergency data requests” to social media platforms seeking account information about specific users they were stalking. According to the government, in each case the men impersonating the foreign police departments told those platforms the request was urgent because the account holders had been trading in child pornography or engaging in child extortion.
Eventually, the two men formed part of a group of cybercriminals known to its members as “ViLE,” who specialize in obtaining personal information about third-party victims, which they then used to harass, threaten or extort the victims, a practice known as “doxing.”
The U.S. government says Singh and Ceraolo worked closely with a third man — referenced in the indictment as co-conspirator #1 or “CC-1” — to administer a doxing forum where victims could pay to have their personal information removed.
The government doesn’t name CC-1 or the doxing forum, but CC-1’s hacker handle is “Kayte” (a.k.a. “KT“) which corresponds to the nickname of a 23-year-old man who lives with his parents in Coffs Harbor, Australia. For several years (with a brief interruption), KT has been the administrator of a truly vile doxing community known as the Doxbin.
A screenshot of the website for the cybercriminal group “ViLE.” Image: USDOJ.
People whose names and personal information appear on the Doxbin can quickly find themselves the target of extended harassment campaigns, account hacking, SIM-swapping and even swatting — which involves falsely reporting a violent incident at a target’s address to trick local police into responding with potentially deadly force.
A handful of Com members targeted by federal authorities have gone so far as to perpetrate swatting, doxing, and other harassment against the same federal agents who are trying to unravel their alleged crimes. This has led some investigators working cases involving the Com to begin redacting their names from affidavits and indictments filed in federal court.
In January 2024, KrebsOnSecurity broke the news that prosecutors in Florida had charged a 19-year-old alleged Scattered Spider member named Noah Michael Urban with wire fraud and identity theft. That story recounted how Urban’s alleged hacker identities “King Bob” and “Sosa” inhabited a world in which rival cryptocurrency theft rings frequently settled disputes through so-called “violence-as-a-service” offerings — hiring strangers online to perpetrate firebombings, beatings and kidnappings against their rivals.
Urban’s indictment shows the name of the federal agent who testified to it has been blacked out:
The final page of Noah Michael Urban’s indictment shows the investigating agent redacted their name from charging documents.
In June 2022, this blog told the story of two men charged with hacking into the Ring home security cameras of a dozen random people and then methodically swatting each of them. Adding insult to injury, the men used the compromised security cameras to record live footage of local police swarming those homes.
McCarty, in a mugshot.
James Thomas Andrew McCarty, Charlotte, N.C., and Kya “Chumlul” Nelson, of Racine, Wisc., conspired to hack into Yahoo email accounts belonging to victims in the United States. The two would check how many of those Yahoo accounts were associated with Ring accounts, and then target people who used the same password for both accounts.
The Telegram and Discord aliases allegedly used by McCarty — “Aspertaine” and “Couch,” among others — correspond to an identity that was active in certain channels dedicated to SIM-swapping.
What KrebsOnSecurity didn’t report at the time is that both ChumLul and Aspertaine were active members of CVLT, wherein those identities clearly participated in harassing and exploiting young teens online.
In June 2024, McCarty was sentenced to seven years in prison after pleading guilty to making hoax calls that elicited police SWAT responses. Nelson also pleaded guilty and received a seven-year prison sentence.
In March 2023, U.S. federal agents in New York announced they’d arrested “Pompompurin,” the alleged administrator of Breachforums, an English-language cybercrime forum where hacked corporate databases frequently appear for sale. In cases where the victim organization isn’t extorted in advance by hackers, being listed on Breachforums has often been the way many victims first learned of an intrusion.
Pompompurin had been a nemesis to the FBI for several years. In November 2021, KrebsOnSecurity broke the news that thousands of fake emails about a cybercrime investigation were blasted out from the FBI’s email systems and Internet addresses.
Pompompurin took credit for that stunt, and said he was able to send the FBI email blast by exploiting a flaw in an FBI portal designed to share information with state and local law enforcement authorities. The FBI later acknowledged that a software misconfiguration allowed someone to send the fake emails.
In December, 2022, KrebsOnSecurity detailed how hackers active on BreachForums had infiltrated the FBI’s InfraGard program, a vetted network designed to build cyber and physical threat information sharing partnerships with experts in the private sector. The hackers impersonated the CEO of a major financial company, applied for InfraGard membership in the CEO’s name, and were granted admission to the community.
The feds named Pompompurin as 21-year-old Peekskill resident Conor Brian Fitzpatrick, who was originally charged with one count of conspiracy to solicit individuals to sell unauthorized access devices (stolen usernames and passwords). But after FBI agents raided and searched the home where Fitzpatrick lived with his parents, prosecutors tacked on charges for possession of child pornography.
Recent actions by the DOJ indicate the government is well aware of the significant overlap between leading members of The Com and harm communities. But the government also is growing more sensitive to the criticism that it can often take months or years to gather enough evidence to criminally charge some of these suspects, during which time the perpetrators can abuse and recruit countless new victims.
Late last year, however, the DOJ signaled a new tactic in pursuing leaders of harm communities like 764: Charging them with domestic terrorism.
In December 2023, the government charged (PDF) a Hawaiian man with possessing and sharing sexually explicit videos and images of prepubescent children being abused. Prosecutors allege Kalana Limkin, 18, of Hilo, Hawaii, admitted he was an associate of CVLT and 764, and that he was the founder of a splinter harm group called Cultist. Limkin’s Telegram profile shows he also was active on the harm community Slit Town.
The relevant citation from Limkin’s complaint reads:
“Members of the group ‘764’ have conspired and continue to conspire in both online and in-person venues to engage in violent actions in furtherance of a Racially Motivated Violent Extremist ideology, wholly or in part through activities that violate federal criminal law meeting the statutory definition of Domestic Terrorism, defined in Title 18, United States Code, § 2331.”
Experts say charging harm groups under anti-terrorism statutes potentially gives the government access to more expedient investigative powers than it would normally have in a run-of-the-mill criminal hacking case.
“What it ultimately gets you is additional tools you can use in the investigation, possibly warrants and things like that,” said Mark Rasch, a former U.S. federal cybercrime prosecutor and now general counsel for the New York-based cybersecurity firm Unit 221B. “It can also get you additional remedies at the end of the case, like greater sanctions, more jail time, fines and forfeiture.”
But Rasch said this tactic can backfire on prosecutors who overplay their hand and go after someone who ends up challenging the charges in court.
“If you’re going to charge a hacker or pedophile with a crime like terrorism, that’s going to make it harder to get a conviction,” Rasch said. “It adds to the prosecutorial burden and increases the likelihood of getting an acquittal.”
Rasch said it’s unclear where it is appropriate to draw the line in the use of terrorism statutes to disrupt harm groups online, noting that there certainly are circumstances where individuals can commit violations of domestic anti-terrorism statutes through their Internet activity alone.
“The Internet is a platform like any other, where virtually any kind of crime that can be committed in the real world can also be committed online,” he said. “That doesn’t mean all misuse of computers fits within the statutory definition of terrorism.”
The RCMP’s advisory on sexual extortion of minors over the Internet lists a number of potential warning signs that teens may exhibit if they become entangled in these harm groups. The FBI urges anyone who believes their child or someone they know is being exploited to contact their local FBI field office, call 1-800-CALL-FBI, or report it online at tips.fbi.gov.
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The U.S. Federal Communications Commission (FCC) today levied fines totaling nearly $200 million against the four major carriers — including AT&T, Sprint, T-Mobile and Verizon — for illegally sharing access to customers’ location information without consent.
The fines mark the culmination of a more than four-year investigation into the actions of the major carriers. In February 2020, the FCC put all four wireless providers on notice that their practices of sharing access to customer location data were likely violating the law.
The FCC said it found the carriers each sold access to its customers’ location information to ‘aggregators,’ who then resold access to the information to third-party location-based service providers.
“In doing so, each carrier attempted to offload its obligations to obtain customer consent onto downstream recipients of location information, which in many instances meant that no valid customer consent was obtained,” an FCC statement on the action reads. “This initial failure was compounded when, after becoming aware that their safeguards were ineffective, the carriers continued to sell access to location information without taking reasonable measures to protect it from unauthorized access.”
The FCC’s findings against AT&T, for example, show that AT&T sold customer location data directly or indirectly to at least 88 third-party entities. The FCC found Verizon sold access to customer location data (indirectly or directly) to 67 third-party entities. Location data for Sprint customers found its way to 86 third-party entities, and to 75 third-parties in the case of T-Mobile customers.
The commission said it took action after Sen. Ron Wyden (D-Ore.) sent a letter to the FCC detailing how a company called Securus Technologies had been selling location data on customers of virtually any major mobile provider to law enforcement officials.
That same month, KrebsOnSecurity broke the news that LocationSmart — a data aggregation firm working with the major wireless carriers — had a free, unsecured demo of its service online that anyone could abuse to find the near-exact location of virtually any mobile phone in North America.
The carriers promised to “wind down” location data sharing agreements with third-party companies. But in 2019, reporting at Vice.com showed that little had changed, detailing how reporters were able to locate a test phone after paying $300 to a bounty hunter who simply bought the data through a little-known third-party service.
Sen. Wyden said no one who signed up for a cell plan thought they were giving permission for their phone company to sell a detailed record of their movements to anyone with a credit card.
“I applaud the FCC for following through on my investigation and holding these companies accountable for putting customers’ lives and privacy at risk,” Wyden said in a statement today.
The FCC fined Sprint and T-Mobile $12 million and $80 million respectively. AT&T was fined more than $57 million, while Verizon received a $47 million penalty. Still, these fines represent a tiny fraction of each carrier’s annual revenues. For example, $47 million is less than one percent of Verizon’s total wireless service revenue in 2023, which was nearly $77 billion.
The fine amounts vary because they were calculated based in part on the number of days that the carriers continued sharing customer location data after being notified that doing so was illegal (the agency also considered the number of active third-party location data sharing agreements). The FCC notes that AT&T and Verizon each took more than 320 days from the publication of the Times story to wind down their data sharing agreements; T-Mobile took 275 days; Sprint kept sharing customer location data for 386 days.
Update, 6:25 p.m. ET: Clarified that the FCC launched its investigation at the request of Sen. Wyden.
Security consulting giant Kroll disclosed today that a SIM-swapping attack against one of its employees led to the theft of user information for multiple cryptocurrency platforms that are relying on Kroll services in their ongoing bankruptcy proceedings. And there are indications that fraudsters may already be exploiting the stolen data in phishing attacks.
Cryptocurrency lender BlockFi and the now-collapsed crypto trading platform FTX each disclosed data breaches this week thanks to a recent SIM-swapping attack targeting an employee of Kroll — the company handling both firms’ bankruptcy restructuring.
In a statement released today, New York City-based Kroll said it was informed that on Aug. 19, 2023, someone targeted a T-Mobile phone number belonging to a Kroll employee “in a highly sophisticated ‘SIM swapping’ attack.”
“Specifically, T-Mobile, without any authority from or contact with Kroll or its employees, transferred that employee’s phone number to the threat actor’s phone at their request,” the statement continues. “As a result, it appears the threat actor gained access to certain files containing personal information of bankruptcy claimants in the matters of BlockFi, FTX and Genesis.”
T-Mobile has not yet responded to requests for comment.
Countless websites and online services use SMS text messages for both password resets and multi-factor authentication. This means that stealing someone’s phone number often can let cybercriminals hijack the target’s entire digital life in short order — including access to any financial, email and social media accounts tied to that phone number.
SIM-swapping groups will often call employees on their mobile devices, pretend to be someone from the company’s IT department, and then try to get the employee to visit a phishing website that mimics the company’s login page.
Multiple SIM-swapping gangs have had great success using this method to target T-Mobile employees for the purposes of reselling a cybercrime service that can be hired to divert any T-Mobile user’s text messages and phone calls to another device.
In February 2023, KrebsOnSecurity chronicled SIM-swapping attacks claimed by these groups against T-Mobile employees in more than 100 separate incidents in the second half of 2022. The average cost to SIM swap any T-Mobile phone number was approximately $1,500.
The unfortunate result of the SIM-swap against the Kroll employee is that people who had financial ties to BlockFi, FTX, or Genesis now face increased risk of becoming targets of SIM-swapping and phishing attacks themselves.
And there is some indication this is already happening. Multiple readers who said they got breach notices from Kroll today also shared phishing emails they received this morning that spoofed FTX and claimed, “You have been identified as an eligible client to begin withdrawing digital assets from your FTX account.”
A phishing message targeting FTX users that went out en masse today.
A major portion of Kroll’s business comes from helping organizations manage cyber risk. Kroll is often called in to investigate data breaches, and it also sells identity protection services to companies that recently experienced a breach and are grasping at ways to demonstrate that they doing something to protect their customers from further harm.
Kroll did not respond to questions. But it’s a good bet that BlockFi, FTX and Genesis customers will soon enjoy yet another offering of free credit monitoring as a result of the T-Mobile SIM swap.
Kroll’s website says it employs “elite cyber risk leaders uniquely positioned to deliver end-to-end cyber security services worldwide.” Apparently, these elite cyber risk leaders did not consider the increased attack surface presented by their employees using T-Mobile for wireless service.
The SIM-swapping attack against Kroll is a timely reminder that you should do whatever you can to minimize your reliance on mobile phone companies for your security. For example, many online services require you to provide a phone number upon registering an account, but that number can often be removed from your profile afterwards.
Why do I suggest this? Many online services allow users to reset their passwords just by clicking a link sent via SMS, and this unfortunately widespread practice has turned mobile phone numbers into de facto identity documents. Which means losing control over your phone number thanks to an unauthorized SIM swap or mobile number port-out, divorce, job termination or financial crisis can be devastating.
If you haven’t done so lately, take a moment to inventory your most important online accounts, and see how many of them can still have their password reset by receiving an SMS at the phone number on file. This may require stepping through the website’s account recovery or lost password flow.
If the account that stores your mobile phone number does not allow you to delete your number, check to see whether there is an option to disallow SMS or phone calls for authentication and account recovery. If more secure options are available, such as a security key or a one-time code from a mobile authentication app, please take advantage of those instead. The website 2fa.directory is a good starting point for this analysis.
Now, you might think that the mobile providers would share some culpability when a customer suffers a financial loss because a mobile store employee got tricked into transferring that customer’s phone number to criminals. But earlier this year, a California judge dismissed a lawsuit against AT&T that stemmed from a 2017 SIM-swapping attack which netted the thieves more than $24 million in cryptocurrency.
A new breach involving data from nine million AT&T customers is a fresh reminder that your mobile provider likely collects and shares a great deal of information about where you go and what you do with your mobile device — unless and until you affirmatively opt out of this data collection. Here’s a primer on why you might want to do that, and how.
Image: Shutterstock
Telecommunications giant AT&T disclosed this month that a breach at a marketing vendor exposed certain account information for nine million customers. AT&T said the data exposed did not include sensitive information, such as credit card or Social Security numbers, or account passwords, but was limited to “Customer Proprietary Network Information” (CPNI), such as the number of lines on an account.
Certain questions may be coming to mind right now, like “What the heck is CPNI?” And, ‘If it’s so ‘customer proprietary,’ why is AT&T sharing it with marketers?” Also maybe, “What can I do about it?” Read on for answers to all three questions.
AT&T’s disclosure said the information exposed included customer first name, wireless account number, wireless phone number and email address. In addition, a small percentage of customer records also exposed the rate plan name, past due amounts, monthly payment amounts and minutes used.
CPNI refers to customer-specific “metadata” about the account and account usage, and may include:
-Called phone numbers
-Time of calls
-Length of calls
-Cost and billing of calls
-Service features
-Premium services, such as directory call assistance
According to a succinct CPNI explainer at TechTarget, CPNI is private and protected information that cannot be used for advertising or marketing directly.
“An individual’s CPNI can be shared with other telecommunications providers for network operating reasons,” wrote TechTarget’s Gavin Wright. “So, when the individual first signs up for phone service, this information is automatically shared by the phone provider to partner companies.”
Is your mobile Internet usage covered by CPNI laws? That’s less clear, as the CPNI rules were established before mobile phones and wireless Internet access were common. TechTarget’s CPNI primer explains:
“Under current U.S. law, cellphone use is only protected as CPNI when it is being used as a telephone. During this time, the company is acting as a telecommunications provider requiring CPNI rules. Internet use, websites visited, search history or apps used are not protected CPNI because the company is acting as an information services provider not subject to these laws.”
Hence, the carriers can share and sell this data because they’re not explicitly prohibited from doing so. All three major carriers say they take steps to anonymize the customer data they share, but researchers have shown it is not terribly difficult to de-anonymize supposedly anonymous web-browsing data.
“Your phone, and consequently your mobile provider, know a lot about you,” wrote Jack Morse for Mashable. “The places you go, apps you use, and the websites you visit potentially reveal all kinds of private information — e.g. religious beliefs, health conditions, travel plans, income level, and specific tastes in pornography. This should bother you.”
Happily, all of the U.S. carriers are required to offer customers ways to opt out of having data about how they use their devices shared with marketers. Here’s a look at some of the carrier-specific practices and opt-out options.
AT&T’s policy says it shares device or “ad ID”, combined with demographics including age range, gender, and ZIP code information with third parties which explicitly include advertisers, programmers, and networks, social media networks, analytics firms, ad networks and other similar companies that are involved in creating and delivering advertisements.
AT&T said the data exposed on 9 million customers was several years old, and mostly related to device upgrade eligibility. This may sound like the data went to just one of its partners who experienced a breach, but in all likelihood it also went to hundreds of AT&T’s partners.
AT&T’s CPNI opt-out page says it shares CPNI data with several of its affiliates, including WarnerMedia, DirecTV and Cricket Wireless. Until recently, AT&T also shared CPNI data with Xandr, whose privacy policy in turn explains that it shares data with hundreds of other advertising firms. Microsoft bought Xandr from AT&T last year.
According to the Electronic Privacy Information Center (EPIC), T-Mobile seems to be the only company out of the big three to extend to all customers the rights conferred by the California Consumer Privacy Act (CCPA).
EPIC says T-Mobile customer data sold to third parties uses another unique identifier called mobile advertising IDs or “MAIDs.” T-Mobile claims that MAIDs don’t directly identify consumers, but under the CCPA MAIDs are considered “personal information” that can be connected to IP addresses, mobile apps installed or used with the device, any video or content viewing information, and device activity and attributes.
T-Mobile customers can opt out by logging into their account and navigating to the profile page, then to “Privacy and Notifications.” From there, toggle off the options for “Use my data for analytics and reporting” and “Use my data to make ads more relevant to me.”
Verizon’s privacy policy says it does not sell information that personally identities customers (e.g., name, telephone number or email address), but it does allow third-party advertising companies to collect information about activity on Verizon websites and in Verizon apps, through MAIDs, pixels, web beacons and social network plugins.
According to Wired.com’s tutorial, Verizon users can opt out by logging into their Verizon account through a web browser or the My Verizon mobile app. From there, select the Account tab, then click Account Settings and Privacy Settings on the web. For the mobile app, click the gear icon in the upper right corner and then Manage Privacy Settings.
On the privacy preferences page, web users can choose “Don’t use” under the Custom Experience section. On the My Verizon app, toggle any green sliders to the left.
EPIC notes that all three major carriers say resetting the consumer’s device ID and/or clearing cookies in the browser will similarly reset any opt-out preferences (i.e., the customer will need to opt out again), and that blocking cookies by default may also block the opt-out cookie from being set.
T-Mobile says its opt out is device-specific and/or browser-specific. “In most cases, your opt-out choice will apply only to the specific device or browser on which it was made. You may need to separately opt out from your other devices and browsers.”
Both AT&T and Verizon offer opt-in programs that gather and share far more information, including device location, the phone numbers you call, and which sites you visit using your mobile and/or home Internet connection. AT&T calls this their Enhanced Relevant Advertising Program; Verizon’s is called Custom Experience Plus.
In 2021, multiple media outlets reported that some Verizon customers were being automatically enrolled in Custom Experience Plus — even after those customers had already opted out of the same program under its previous name — “Verizon Selects.”
If none of the above opt out options work for you, at a minimum you should be able to opt out of CPNI sharing by calling your carrier, or by visiting one of their stores.
Why should you opt out of sharing CPNI data? For starters, some of the nation’s largest wireless carriers don’t have a great track record in terms of protecting the sensitive information that you give them solely for the purposes of becoming a customer — let alone the information they collect about your use of their services after that point.
In January 2023, T-Mobile disclosed that someone stole data on 37 million customer accounts, including customer name, billing address, email, phone number, date of birth, T-Mobile account number and plan details. In August 2021, T-Mobile acknowledged that hackers made off with the names, dates of birth, Social Security numbers and driver’s license/ID information on more than 40 million current, former or prospective customers who applied for credit with the company.
Last summer, a cybercriminal began selling the names, email addresses, phone numbers, SSNs and dates of birth on 23 million Americans. An exhaustive analysis of the data strongly suggested it all belonged to customers of one AT&T company or another. AT&T stopped short of saying the data wasn’t theirs, but said the records did not appear to have come from its systems and may be tied to a previous data incident at another company.
However frequently the carriers may alert consumers about CPNI breaches, it’s probably nowhere near often enough. Currently, the carriers are required to report a consumer CPNI breach only in cases “when a person, without authorization or exceeding authorization, has intentionally gained access to, used or disclosed CPNI.”
But that definition of breach was crafted eons ago, back when the primary way CPNI was exposed was through “pretexting,” such when the phone company’s employees are tricked into giving away protected customer data.
In January, regulators at the U.S. Federal Communications Commission (FCC) proposed amending the definition of “breach” to include things like inadvertent disclosure — such as when companies expose CPNI data on a poorly-secured server in the cloud. The FCC is accepting public comments on the matter until March 24, 2023.
While it’s true that the leak of CPNI data does not involve sensitive information like Social Security or credit card numbers, one thing AT&T’s breach notice doesn’t mention is that CPNI data — such as balances and payments made — can be abused by fraudsters to make scam emails and text messages more believable when they’re trying to impersonate AT&T and phish AT&T customers.
The other problem with letting companies share or sell your CPNI data is that the wireless carriers can change their privacy policies at any time, and you are assumed to be okay with those changes as long as you keep using their services.
For example, location data from your wireless device is most definitely CPNI, and yet until very recently all of the major carriers sold their customers’ real-time location data to third party data brokers without customer consent.
What was their punishment? In 2020, the FCC proposed fines totaling $208 million against all of the major carriers for selling their customers’ real-time location data. If that sounds like a lot of money, consider that all of the major wireless providers reported tens of billions of dollars in revenue last year (e.g., Verizon’s consumer revenue alone was more than $100 billion last year).
If the United States had federal privacy laws that were at all consumer-friendly and relevant to today’s digital economy, this kind of data collection and sharing would always be opt-in by default. In such a world, the enormously profitable wireless industry would likely be forced to offer clear financial incentives to customers who choose to share this information.
But until that day arrives, understand that the carriers can change their data collection and sharing policies when it suits them. And regardless of whether you actually read any notices about changes to their privacy policies, you will have agreed to those changes as long as you continue using their service.
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