A lawsuit involving stolen crypto and one of America’s largest mobile carriers is moving forward. The $224 million suit involved digital identity theft which resulted in one customer losing s substantial amount of cryptocurrency last year.
AT&T Blamed For SIM Swap Fraud
A Los Angeles federal judge rejected the telecoms giant’s request to have the lawsuit dismissed. The plaintiff, Michael Terpin, filed the 69 page complaint almost a year ago. According to CNBC, Terpin is seeking $200 million in punitive damages, and $24 million of compensatory damages from AT&T for his lost cryptocurrency.
“The evidence will show that AT&T not once, but twice allowed hackers posing as Michael to obtain his SIM card,”
Terpin is no crypto newbie having co-founded an angel group for Bitcoin investors called BitAngels in 2013. He claims to have been the victim of two hacks in seven months, both using AT&T which he alleges colluded with the perpetrators through insider information on his account.
The incursions were carried out through a method called SIM swapping whereby cyber criminals steal user’s phone numbers in order to log in to their crypto wallets and accounts. In this case the access was gained without AT&T staff requiring the hacker to show proof of identification or provide a valid password. Terpin stated:
“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,”
Cyber security experts are advising those that deal with cryptocurrencies using their phones to guard the number the same way as they would a password or key phrase. The safest method of crypto storage is still a cold wallet as hacking methods become more sophisticated.
Crypto Hacking Still a Curse
According to American cyber security company CipherTrace, crypto exchange hacking is also still a scourge with exchanges already having lost $1.2 billion in the January-March period this year. The majority of this loot had been lifted from exchange based hot wallets, similar to those accessed in the AT&T case. Three Asian exchanges, Binance, Bitpoint, and Bitrue, have fallen victim to hackers so far this year.
The rejection of AT&T’s attempt at dismissal is good news for crypto security as a whole and will have a greater impact if the plaintiff is awarded any damages as a result of negligence on the security front from one of the world’s largest telecoms companies.
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