AT&T back in court over $24M SIM swap crypto heist

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Telecommunications giant AT&T is facing renewed legal challenges in a case linked to a SIM swap hack. A federal appeals court revived a lawsuit where a customer lost over $24 million in crypto after the company allegedly let hackers gain control of a phone number linked to their crypto accounts.

The legal battle began in 2020 when a crypto investor Michael Terpin sued Ellis Pinsky, accusing him of stealing $24 million worth of crypto through a SIM swap. However, Pinsky, just 15 at the time, allegedly bribed an AT&T employee to transfer Terpin’s SIM card information. This allowed him to bypass the two-factor authentication for Terpin’s crypto wallet.

$24M SIM swap hack case revived

As per the filings, plaintiff Michael Terpin had claimed that the Federal Communications Act survived dismissal as he raised a triable issue. The lawsuit will examine whether AT&T gave a hacker access to information protected by the act when it enabled the hacker to perform a “SIM swap”.

This complex case earned Pinsky the nickname “Baby Al Capone.” The Ninth Circuit Court had recently upheld several rulings in AT&T’s favor. However, the court reinstated a key claim under Section 222 of the Federal Communications Act.

This suggests that Terpin can continue to pursue $24 million in damages, plus interest and attorney’s fees which turns out to be around $45 million from the communication giant.

Michael Terpin has previously sued alleged hacker Ellis Pinsky for $71.4 million. Pinsky had returned around $2 million. The crypto investor won a $75.8 million lawsuit in 2019 against Baby Al Capone’s accomplice, Nicholas Truglia.

Pinsky is now a New York University graduate. He had reportedly agreed to testify against AT&T in the ongoing case. This move could heavily impact the legal scope of telecom companies.

Sim swap hacks have become a problem 

On-chain sleuth, ZachXBT commented on the matter. He stated that, hopefully, Terpin will see some success against AT&T. He suggested that US telecom companies need to be held accountable for all of these SIM swaps.

 

He referred to an investigation from August 2023, where he revealed that more than $13.3 million was stolen in 54 SIM swaps targeting the crypto community. He mentioned that when an account is compromised scammers try to create a sense of urgency with a fake claim to drain your assets.

ZachXBT advised never to use SMS 2FA and advised people to opt for an authenticator app or security key to secure accounts.

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