A sim swapping victim who sued AT&T for negligence after he was robbed of almost $24 million worth of cryptocurrency has been awarded $75.8 million by Los Angeles District Court. Michael Terpin filed the $224 million lawsuit in August 2018, accusing the telecoms giant of “gross negligence” in the loss, claiming that its employees “actively cooperated with hackers” and gave them access to private customer information. Sim swapping, which involves a fraudster porting an individual’s sim card details to them, has been responsible for a growing number of crypto thefts in recent months.
AT&T Accused of Complicity
In the filing, Terpin claimed that he had been compromised twice in the seven months during 2017-18, stating that his private accounts had been accessed through “digital identity theft.” According to Terpin the first hack was down to an “insider cooperating with the hacker”, which he believed involved an AT&T worker handing over his phone number and other private information to an impostor. The hacker was then able to use his these details to gain access to his crypto wallets and steal his holdings, which Terpin claimed was becoming an epidemic:
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…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.
Terpin Wins Millions
Terpin himself is no crypto amateur who lucked out by buying in early. He is the co-founder of BitAngels, an angel investment group for cryptocurrency projects, as well as being involved in the Daaps Fund and the Alphabet Fund, two huge crypto-related hedge funds. He is also the CEO of Transform PR, a public relations and advisory service for ICOs. Outside of the cryptocurrency space Terpin co-founded Marketwired, the first online corporate newswire.
Clearly, Terpin was able to call on some solid legal counsel, initially seeking $23.8 million in compensation from AT&T and another $200 million in punitive damages, with the eventual award being just over 20% of the total. The fact that the court agreed with some of his assertions of AT&T’s complicity should be a very worrying sign though, and is another reason why you should always ensure your crypto holdings are safely stored, especially when they’re worth nearly $24 million.