Cryptocurrency Exchange, Bittrex, is battling a lawsuit filed against them by a client whose 100 Bitcoins were hacked and stolen while held under their custodial services. Gregg Bennett, the client in question, lost close to $1 million of his investment given the prevailing BTC price.
The hack took place in April 2019 after Gregg’s AT&T sim was swapped and a Bittrex account accessed by the malicious system intruders. Gregg, an angel investor based in Seattle, took the matter before a court in Washington State. He accuses Bittrex of violating its security protocols which they have published for consumer knowledge and protection.
Gregg claims that the hackers used an IP address from Florida and this should have alarmed Bittrex of a probable breach in his account. The hackers withdrew 100 BTC which is the maximum limit set by Bittrex for span of 24 hours; they later liquidated some of the Bitcoin at prices way below the market value. His defense team claims that Bittrex ought to have stopped withdrawals from this account for at least a day within which the password was changed.
Bittrex in its defense commented on the issue through their CEO, Bill Shihara. The digital exchange noted that they have put in place security measures such as email and two-factor authentication within its ecosystem.
Bill added that a client’s email may also be hacked exposing them to the risk posed by crypto hackers; an issue they have highlighted in the past;
“I think this is a problem that requires a lot of solutions and a lot of layers of security. And unfortunately, one of the mantras that we use and often publish articles about is that ultimately you can’t trust your phone. You have to be aware that you could lose control of your phone.”
According to Gregg, the hacking may have been facilitated by insiders working for AT&T because his social security and pin numbers were changed. However, the angel investor from Seattle is yet to sue AT&T as well but noted that this option is still open for him.
Jim Greer, a spokesman for AT&T, said that they have in the past warned clients on trusting their phones in data security and are working to improve this;
“Fraudulent SIM swaps are a form of theft committed by sophisticated criminals. We are working closely with our industry, law enforcement and consumers to stop and prevent this type of crime.”