US Federal Judge Refuses To Dismiss $224 Million Lawsuit Against AT&T Regarding SIM-Swapping
American multinational conglomerate holding company AT&T has no way to avoid the lawsuit filed by a crypto investor who lost $24million in a SIM-swapping hack.
History Of The Issue
At its most basic level, a SIM swap is when someone convinces your carrier to switch your phone number over to a SIM card they own. By diverting your incoming messages, scammers can easily complete the text-based two-factor authentication checks that protect your most sensitive accounts.
Michael Terpin, a cryptocurrency investor, filed a $223.8 million lawsuit against AT&Ton 16 counts of fraud, gross negligence, invasion of privacy, unauthorized disclosure of confidential customer records, violation of a consent decree, failure to supervise its employees and investigate their criminal background, and related charges in US District Court in Los Angeles.
The incident took place on January 2018 when over more than 3 million crypto tokens from Terpin got stolen because of AT&T’s security flaws. AT&T’s gross negligence is compounded by the fact it promised Terpin unbreachable security on its end through a unique, purportedly unchangeable password following a smaller SIM swap theft in June 2017.
AT&T publicly declared its innocence in the matter, insisting that the company looks forward to a chance to prove itself in a court of law. Terpin, for his part, has sought $200 million in punitive damages on top of the premium for the stolen crypto assets.
On July 22, 2019, Terpin’s legal team publicly announced that federal judge Otis Wright II blocked AT&T’s attempt.
Judge Wright stated:
“Based on the allegations of the Complaint, Mr. Terpin asserts that AT&T assisted the hackers with a SIM card swap, thus granting the hackers access to Mr. Terpin’s phone number. This allegedly resulted in Mr. Terpin losing $24 million in cryptocurrency. However, Mr. Terpin does not explain how the hackers accessed Mr. Terpin’s cryptocurrency account(s), whether they sold Mr. Terpin’s cryptocurrency then transferred the money, or whether they transferred the cryptocurrency to a cold wallet. At this stage, the Court is left to speculate how having access to Mr. Terpin’s phone number resulted in the theft of cryptocurrency.”
To this, Wright remarked:
“I am grateful that Judge Wright is allowing my case to proceed. We must hold AT&T accountable. If AT&T demonstrated the same zeal to totally revamp its porous security system as it does to suppress the damning evidence of its callous indifference to its customers, we would not be in court.”
Notably a couple of months back, Terpin won a case over $75 million in a lawsuit related to a SIM-swapping fraud against 21-year-old Nicholas Truglia earlier this year, saying the Manhattan resident had defrauded him of cryptocurrencies after gaining control of his cellphone number.