Cryptocurrency investor Michael Terpin has recently sued telecommunications giant AT&T alleging that the company has failed to protect his cell phone data which the hackers exploited to steal his cryptocurrency holdings worth $24 million. As reported by CNBC, California-resident Terpin has filed a 69-page lawsuit through the Los Angeles litigation firm Greenberg Glusker on Wednesday, August 15.
The plaintiff has sued AT&T for nearly $224 million while alleging that the cellular service provider has been negligent in the protection of the customer data allowing hackers to get unauthorized access to his cell-phone account. Terpin’s case is a classic example of the SIM swap fraud wherein the hacker has impersonated Terpin’s identity while convincing the AT&T employee to give him access to Terpin’s phone number without asking him for valid identity proof. This way the hacker managed to get the PIN code to Terpin’s account.
As a result, the hacker got access to Terpin’s accounts at different services that also involves cryptocurrency wallets. In the lawsuit, the plaintiff claims that his account has been hacked twice in the last seven months. In his complaint, Terpin notes:
As per the suit filed against AT&T, Terpin has claimed $23.8 million as compensatory damages and an additional $200 as punitive damages. The lawsuit also claims that AT&T has been too complacent in handling the security issues for its customers having failed multiple times in protecting the client’s interest. The plaintiff further accused the telecommunications giant alleging:
“In recent incidents, law enforcement has even confirmed that AT&T employees profited from working directly with cyber terrorists and thieves in SIM swap frauds.” He further added: “mainstream adoption of cryptocurrency cannot take place as long as phone company employees are handing over critical unauthorized access to the heart of everyone’s digital lives.”
Upon reaching out to AT&T, the company’s director for corporate communications Jim Greer said:
“We dispute these allegations and look forward to presenting our case in court.”
This year there have been multiple cases of cryptocurrency hacking where hackers have managed to steal digital assets worth millions of dollars from the wallets of customers. Meanwhile, apart from this traditional stealing methods, study shows that ‘cryptojacking’ has been on a high rise, a hacking technique that involves targetting online computers while using their machine powers to mine digital currencies. Terpin’s case is a recent example of the risks associated with the SIM-based two-factor authentication.
As a result, crypto investors should consider using the “cold storage” wallets which store the digital assets on a hardware device without exposing the risks of being constantly connected to the online networks.