The authorities of Oklahoma’s City Police has arrested a 23 year old Fletcher Robert Childers (pictured left) and 21 year old Joseph Harris (pictured right) on suspicions of stealing through hacking some $14 million worth of a little known cryptocurrency called Crowd Machine.
The two young men who are both residents of Missouri were arrested at a west side hotel on Monday with court documents stating they hacked through a SIM swap a billion Crowd Machine Compute Tokens (CMCTs).
The hack occurred around September 22nd when CMCT’s price dropped by some 87% on far higher trading volumes than usual.
That brought the market cap of this very small project to about $1 million, with half a billion tokens circulating while 1.5 billion were kept by the project.
One billion of them were stolen through an identity theft of sorts whereby the two men in question managed to persuade the SIM carrier to transfer CMCT’s phone number to them after pretending to be the owner of the phone number used as a two factor authenticator for the funds in question.
The social engineering hack was announced on September 24th with little detail provided except to say they are working with law enforcement agencies.
On that day, the two men were arrested with it unclear how the police was able to act so quickly, but it may be the hackers left traces with the SIM carriers or elsewhere.
The price action clearly shows they sold millions of these tokens, with the project now hoping to recover whatever is left. They say: “It is highly recommended that no one purchase CMCTs until the criminal investigations have ceased, at which time, we expect closed exchanges to re-open. Purchases of stolen tokens by those not involved with the theft will be honored.”
Trading for this token, which is listed on some top tier exchanges by trading volumes, has been suspended as the events unfold with it unclear when they plan to return to normal operations.
The project itself is a Golem clone of sorts, offering decentralized computing by tapping into idle resources shared by individuals with spare computing power.
It is one of the first crypto project to see the alleged hackers arrested, with law enforcement so gaining crypto expertise and thus apparently now able to act.