17-year-old from Hamilton charged in $46-million cryptocurrency theft allegedly stole from Bitcoin pioneer
A Hamilton teen, charged last week in a multi-million-dollar cryptocurrency theft, allegedly stole from a California-based entrepreneur considered a Bitcoin pioneer.
Josh Jones lost $46 million in Bitcoin when he was targeted in the SIM swap attack in February 2020, The Spectator has confirmed with multiple sources.
Jones first reported the theft to the Los Angeles FBI, who then brought in other U.S. and Canadian agencies as the investigation grew.
Authorities say this was the largest ever cryptocurrency theft from a single victim. Authorities have not said what role the 17-year-old from Hamilton allegedly played in the theft, or if he had help.
The Santa Clara County District Attorney's Office, in the San Francisco Bay Area, confirmed it became involved after its specialized tech-crime team received tips after news of the theft spread in cryptocurrency circles.
Rumours about the theft had been circulating online since early 2020 after someone - suspected but not confirmed to be Jones - posted about it on Reddit. That post has since been taken down, but many comments included criticism for leaving such a large amount of Bitcoin accessible on a phone.
A SIM swap attack involves a perpetrator manipulating a cellphone carrier into changing a phone number over to a SIM card they control. This gives the hacker access to the victim's phone, where they can intercept two-factor authorizations and access accounts. The hacker can get into everything from email, to banking, to social media, to a cryptocurrency wallet.
Jones has never commented on the theft, including in recent interviews he's given about his work and investments. He could not be reached for comment.
According to various interviews and profiles, in 1996 Jones co-founded DreamHost, a successful web hosting provider, with three fellow undergraduate classmates at Harvey Mudd College, a private college in California. In 2013, he sold his shares in that company, but has been involved in numerous other ventures.
In 2010 he became one of the earliest investors in Bitcoin and has since amassed a fortune in the cryptocurrency. Other projects include starting an e-publishing business for children's books, a California-based accelerator and an investment firm. The Bitcoin theft does not appear to have slowed his acquisitions - he recently bought an airline and has a production company that bought the animation rights to the long-running comic Groo the Wanderer.
In a recent interview on the podcast LA Venture he's dubbed the richest, goofiest, most confident yet normal-seeming person."
In the 31-minute episode he explains his irrational self-confidence" that has led him to invest in companies or ideas that others view as too risky. He almost always believes he's right, despite naysayers.
Just the fact that everyone on earth thinks that Bitcoin is crazy, and no one is telling me why, doesn't matter," he says, recalling back to 2010 when he started mining Bitcoin.
Bitcoin is the most well-known cryptocurrency - a digital currency that uses blockchain technology that spreads transactions across multiple computers. The technology is considered more secure than traditional banking against hacking, however, police say thefts are on the rise. In this case the Bitcoin was accessible on the victim's phone.
U.S. investigators discovered that some of the stolen cryptocurrency was used to buy a unique online gaming name. That purchase is what led authorities to Hamilton. After tracing the gaming name purchase here, U.S. authorities contacted Hamilton police in March 2020 and the local cyber crime team began digging into the case.
Det. Const. Kenneth Kirkpatrick previously told The Spectator that Hamilton's cyber crime unit was able to recover cryptocurrency now valued at $7 million. It's not clear where the rest of the Bitcoin ended up.
The Hamilton teen faces charges of theft over $5,000 and possession of property or proceeds of property obtained by crime. He cannot be identified under the Youth Criminal Justice Act.
The value of Bitcoin has grown significantly since early 2020, so the stolen cryptocurrency would now be well over the initial $46 million Canadian.
The Santa Clara DA office said it was a very standard SIM swap." What makes this case unique is the large dollar amount stolen from one person. There are no pending charges in the U.S.
The Hamilton teen is scheduled to be in court Friday.
Nicole O'Reilly covers crime and justice for The Spectator. noreilly@thespec.com