AT&T Caught Up In Another SIM Swap Hack As Three Crypto Execs Lose $1.8 Million

  • The three executives impacted were all in attendance at Consensus 2018.
  • Seth Shapiro knew something was wrong with his phone when he lost reception at the event.

The cryptocurrency industry is no stranger to hacking, but many hackers choose a hands-off approach, infiltrating systems remotely. However, Seth Sharpiro of VideoCoin recently became the subject of a SIM swapping hack, which he is suing AT&T to resolve. Shapiro alleges that the hack cost him $1.7 million in digital assets and that three executives were targeted in the attack.

Filed on October 17th, the lawsuit states that the hackers were granted repeated access to the SIM card by the cell carrier last May. In the process, the hackers stole over $1.8 million as they cleared out his wallets that he held on 11 exchanges. The complaint elaborates for a total of 58 pages, in which Shapiro lays out the massive web of conspiracies, insiders, and back-to-back SIM swaps. His evidence must be clear because at least two employees at AT&T have already ended up in criminal court.

The complaint states,

“By utilizing their control over Mr. Shapiro’s AT&T cell phone number—and the control of additional accounts (such as his email) secured through that number by utilizing two factor authentication—these third-party hackers were able to access Mr. Shapiro’s accounts on various cryptocurrency exchange platforms, including the accounts he controlled on behalf of his business venture. The hackers then transferred Mr. Shapiro’s currency from Mr. Shapiro’s accounts into accounts that they controlled. In all, they stole more than $1.8 million from Mr. Shapiro in the two consecutive SIM swap attacks on May 16, 2018.”

Two former employees of AT&T in Tucson, Arizona – Jarrett White and Robert Jack – are accused of being the key to the whole operation. From the hackers, the duo received $4,300 and $585.25, individually, from “The Community,” which is a name used for the hackers. These payments were meant to provide the hackers with insider information, which gave them access to Shapiro’s cell phone.

According to Shapiro, $1 million of the $1.757 million belonged to him, while the remaining amount came from other's who had invested in cryptocurrency projects alongside him. Along with Shapiro, the hackers also took control of the SIM cards of two other executives at the Consensus 2018 event, who were not mentioned in the recent filing.

The three executives impacted are actually partners in several investment funds and crypto PR companies. All three are speaking at a conference with Michael Terpin, the most notable victim of the crypto swapping. Terpin is also suing AT&T for a SIM hacking, with his being  more costly at $23.8 million. He is seeking an additional $200 million to cover punitive damages.

Shapiro, Terpin, and Kitze are all part of Pro Top Company Services, which advertises crypto investment funds. The company, made up of nine members, is much like the Alphabit Fund with seven members. When the theft actually occurred, VideoCoin had just announced the end of a $50 million ICO, done through private investments instead of public sales. Some of the investors included Galaxy Investment Partners, Ethereum co-founder Anthony Di Iorio, Akamai Co-Founder Randall Kaplan, Science Blockchain and Alphabit Fund.

When speaking with investigators, Shapiro stated that he was specifically targeted on May 16th, 2018, when he visited an AT&T store in Manhattan to help him after losing cell reception. At the store, salespersons confirmed that a SIM swapping hack occurred, which prompted him to purchase a new phone and SIM card out of fear that his cryptocurrency accounts were in danger. However, “The Community” and their insiders managed to stay ahead, pulling his funds from a Bittrex account.

Though AT&T received requests for comment by CoinDesk, they had not replied by press time.

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