Judge Refuses to Dismiss $224M Crypto Theft against AT&T

The plaintiff claims that the company was at fault and thus should pay him a $224 million compensation.

A California lawsuit in which cryptocurrency investor Michael Terpin accuses telecommunications giant AT&T Mobility (NYSE: T) of negligence, fraud, and other violations will move forward, a Los Angeles federal judge ruled today.

Earlier last year, AT&T found itself on the end of a lawsuit after a customer accused it of allowing hackers to swap his SIM card, in what appears to be an elaborate scheme by fraudsters.

London Summit 2019 Launches the Latest Era in FX and Fintech – Join Now

Michael Terpin, a serial cryptocurrency entrepreneur and technology startup extraordinaire, claimed that AT&T’s lack of security allowed hackers to enter his wireless account and steal crypto coins worth roughly $24 million.

Phone and internet service provider, however, claimed that it is not responsible for a series of recent SIM-swapping complaints. But the Judge engaged in the lawsuit denied AT&T’s request to dismiss the case or disregard its legal obligations, saying the company “can be held to answer a lawsuit by Michael Terpin for enabling the theft of $24 million of his cryptocurrency by giving his SIM card to hackers.”

The statement further adds: “ The Hon. Otis Wright II rejected the wireless carrier’s effort to dismiss Terpin’s lawsuit for $224 million in its entirety, allowing the cryptocurrency thought leader to pursue federal claims for violation of the Federal Communications Act, breach of contract, and other violations of law.”

Suggested articles

How Will Zero-Fee Investment Platforms Impact Traditional Stock Brokers?Go to article >>

The lawsuit described the case as an example of classic identity theft, in which hackers gained access to sensitive financial information by stealing personal data. The plaintiff is seeking damages and injunctive relief, claiming that the company was at fault and thus should pay him $224 million of compensation.

The carrier was at fault here

It is unclear exactly how the thieves replaced Terpin’s mobile SIM, but the lawsuit suggests they impersonated him to AT&T’s customer service agents and requested that the phone number be transferred to their own device.

Once the thieves had access to his phone number, they were able to request a password change and reset the security on many of his accounts, effectively locking him out. The hackers also changed the password on his cryptocurrency account and initiated the transfer of digital assets to their own wallets.

The suit goes on to attribute the incident to “AT&T’s willing cooperation with the hacker, gross negligence, violation of its statutory duties, and failure to adhere to its commitments in its Privacy Policy.”

“What AT&T did was like a hotel giving a thief with a fake ID a room key and a key to the room safe to steal jewelry in the safe from the rightful owner,” the complaint alleged.

Got a news tip? Let Us Know