Cryptocurrency investor Michael Terpin has sued the telecom giant AT&T, alleging that the company failed to protect his cell phone from a hacking incident that ultimately cost him $24 million.
In a lawsuit filed by Los Angeles litigation firm Greenberg Glusker on August 15, Terpin claimed that AT&T’s employees have been complicit in a SIM swap fraud. In this type of scam, criminals pose as the owners of their victims’ mobile phone numbers, convincing telecom providers to grant them access to their phones.
This allows them to access the victim’s accounts at various services, which includes cryptocurrency wallets.
The lawsuit claims that Terpin’s account has been hacked twice in seven months, saying “most troubling, AT&T has not improved its protections even though it knows from numerous incidents that some of its employees actively cooperate with hackers in SIM swap frauds by giving hackers direct access to customer information and by overriding AT&T’s security procedures.”
Terpin is seeking $23.8 million in compensatory damages and a further $200 million in punitive damages, according to the suit.
The lawsuit also claims that security issues are nothing new to AT&T, which has been already accused of failing to protect its clients.
“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,” the plaintiff contended.
In a statement, Terpin said that “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.”
When reached for comment, AT&T director for corporate communications Jim Greer told CoinDesk that “we dispute these allegations and look forward to presenting our case in court.”
He declined to elaborate on the company’s objections to the allegations.
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