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A Hamilton teenager has been charged in a $46-million cryptocurrency theft, the largest ever reported by a single victim, police say.

In March, 2020, the Hamilton Police Service’s cyber crimes unit received a call from the FBI. Along with the U.S. Secret Service’s electronic crimes task force, the FBI was investigating a cryptocurrency theft from a victim in the United States.

Some of the stolen cryptocurrency was used to buy a rare username for a video-gaming network, and the account behind that transaction, investigators discovered, was linked to a Hamilton address.

Hamilton police investigated the address, Detective Constable Kenneth Kirkpatrick said, which led them to the suspect: a teenager.

The teen has been charged with theft over $5,000, and possession of property or proceeds of property obtained by crime.

On Wednesday, officers seized more than $7-million in cryptocurrency.

The accused cannot be identified under the Youth Criminal Justice Act. Det. Constable Kirkpatrick was reluctant to provide many details, including whether the teen is believed to have acted alone or as part of a larger group.

The theft was allegedly done through what’s known as a SIM swap attack.

Typically in this fraud scheme, the scammer calls the target’s mobile service provider and, claiming their phone has been lost or stolen, requests that the phone number be linked to a new SIM card that they control. (SIMs, or subscriber identity modules, are the tiny chip-containing cards that connect cellphones to wireless networks.)

The Globe and Mail provided the first ever glimpse into the prevalence of phone number fraud attacks in Canada in October. According to data from Canada’s telecom regulator, there were 3,038 SIM swaps between August, 2019, and May, 2020.

Globally, more than US$2-trillion is invested in crypto assets – more than the total amount managed by Canadian mutual funds and exchange-traded funds. Some securities regulators have started sounding the alarm about the sector’s dark side. Gary Gensler, a crypto expert who now runs the U.S. Securities and Exchange Commission, launched a recent media campaign to warn investors that the industry is rife with fraud, scams and abuse.

“This is something that’s new to policing. It’s new to us as society in general,” Det. Constable Kirkpatrick said of cryptocurrency, adding that a focus of his three-year-old unit’s work is public awareness.

“Educating our society with the dos and don’ts, like making sure you have multifactor authentication with your social media and e-mail and financial accounts is very important. And making sure you’re using different passwords for all your different accounts,” he said. “Make sure that if one place is breached and your password gets out there, not all of your accounts are compromised as a result of that. The education piece around cyber crime in its initial state is very important.”

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