As reported by Reuters, Michael Terpin, an entrepreneur and cryptocurrency investor, is suing AT&T for gross negligence in relation to cryptocurrency theft. According to the 69-page complaint, Terpin lost around USD 24 Million due to –
The AT&T cryptocurrency theft
In the space of 7 months, Terpin was the victim of two hacks. Terpin is not only claiming theft that resulted due to negligence on behalf of AT&T; the case implies willing cooperation. After the first hack, Terpin claimed that the imposter was able to get his phone number from an AT&T insider. The phone number was later used to gain access to Terpin’s cryptocurrency accounts.
“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.”
It is unclear what type of wallet he was using to store his coins. With all of the sophisticated details that go into storing cryptocurrency securely, the vast majority of people are falling prey to simple phishing scams and classical fraud maneuvers. This was a very basic case of identity theft. But the hackers must have known beforehand that Terpin chose to keep all of his assets on his mobile device.
Heist details – sim card swap
According to the complaint, the cryptocurrency theft was carried out through a sim card swap, which allowed hackers to gain access on January 7th, 2018. The sim card swap involves getting the operator to transfer the phone number to a different sim, which appears to have been done without any identity verification procedures.
The fraud seems to have been a classic approach, whereby hackers impersonated Terpin and requested that the phone number be transferred to their own device. Alternatively, somebody was working on the inside, as claimed in the suit. In either case, it is either gross negligence or active criminality.
Once the phone number was acquired, the hackers requested a password change and reset the security on many of his accounts, changing the password on his cryptocurrency accounts, and transferring funds to external digital wallets. This is not the first hack on a well-known cryptocurrency investor.
Terpin co-founded an angel group called BitAngels in 2013. He is seeking USD 200 Million in punitive damages and USD 24 Million in compensation for the cryptocurrency theft. AT&T has recently come under the spotlight for colluding with the NSA in the wiretapping scandal, exposing the world’s communications for scrutiny without consent from any party.
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Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.