Using SMS as a form of two-factor authentication has always been popular among crypto enthusiasts. After all, many users are already trading their cryptocurrencies or managing social pages on their phones, so why not simply use SMS to verify when accessing sensitive financial content?
Unfortunately, con artists have lately caught on to exploiting the wealth buried under this layer of security via SIM-swapping, or the process of rerouting a person’s SIM card to a phone that is in possession of a hacker. In many jurisdictions worldwide, telecom employees won’t ask for government ID, facial identification or social security numbers to handle a simple porting request.
Combined with a quick search for publicly available personal information (quite common for Web3 stakeholders) and easy-to-guess recovery questions, impersonators can quickly port an account’s SMS 2FA to their phone and begin using it for nefarious means. Earlier this year, many crypto YouTubers fell victim to a SIM-swap attack where hackers posted scam videos on their channel with text directing viewers to send money to the hacker’s wallet. In June, Solana nonfungible token (NFT) project Duppies had its official Twitter account breached via a SIM-swap, with hackers tweeting links to a fake stealth mint.
In regard to this matter, Cointelegraph spoke with CertiK’s security expert Jesse Leclere. Known as a leader in the blockchain security space, CertiK has helped over 3,600 projects secure $360 billion worth of digital assets and detected over 66,000 vulnerabilities since 2018. Here’s what Leclere had to say:
“SMS 2FA is better than nothing, but it is the most vulnerable form of 2FA currently in use. Its appeal comes from its ease of use: Most people are either on their phone or have it close at hand when they’re logging in to online platforms. But its vulnerability to SIM card swaps cannot be underestimated.”
Leclere explained that dedicated authenticator apps — such as Google Authenticator, Authy or Duo — offer nearly all the convenience of SMS 2FA while removing the risk of SIM-swapping. When asked if virtual or eSIM cards can hedge away the risk of SIM-swap-related phishing attacks, for Leclere, the answer is a clear no:
“One has to keep in mind that SIM-swap attacks rely on identity fraud and social engineering. If a bad actor can trick an employee at a telecom firm into thinking that they are the legitimate owner of a number attached to a physical SIM, they can do so for an eSIM as well.”
Though it is possible to deter such attacks by locking the SIM card to one’s phone (telecom companies can also unlock phones), Leclere nevertheless points to the gold standard of using physical security keys. “These keys plug into your computer's USB port, and some are near-field communication (NFC) enabled for easier use with mobile devices,” explained Leclere. “An attacker would need to not only know your password but physically take possession of this key in order to get into your account.”
Leclere pointed out that after mandating the use of security keys for employees in 2017, Google has experienced zero successful phishing attacks. “However, they’re so effective that if you lose the one key that is tied to your account, you will most likely not be able to regain access to it. Keeping multiple keys in safe locations is important,” he added.
Finally, Leclere said that in addition to using an authenticator app or a security key, a good password manager makes it easy to create strong passwords without reusing them across multiple sites. “A strong, unique password paired with non-SMS 2FA is the best form of account security,” he stated.