Michael Terpin is suing AT&T for $224 million for their part in a SIM swapping theft of $24 million in cryptocurrency.

One of the nightmares that cryptocurrency holders face is having a criminal loot their wallets. There are various ways that criminal elements gain access to a person’s coins, but a recent trend that’s surging is SIM swapping (also known as SIM hijacking). This is when someone is able to steal the data from a user’s SIM card from their cell phone. One cryptocurrency investor has had this happen to him, causing him to lose $24 million. Now he’s suing his cell phone provider, AT&T, for $224 million.

Massive Cryptocurrency Lawsuit

Michael Terpin is a cryptocurrency investor. He co-founded BitAngels, an angel group for Bitcoin investors, and BitAngels/Dapps Fund, a cryptocurrency fund. He’s also a victim of SIM swapping.

Terpin had his cell phone information stolen twice in a seven month period. The thief behind the first hack allegedly worked with an AT&T insider and was able to access Terpin’s account despite not showing a valid ID or providing a password to an AT&T store employee (both of which are required).

Overall, Terpin lost $24 million in cryptocurrency due to the hackers being able to access his cell phone account. In his lawsuit, Terpin states:

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.

As would be expected, AT&T says that they “dispute these allegations and look forward to presenting our case in court.” Terpin is suing for $24 million in compensatory damages and another $200 million in punitive damages.

SIM Swapping on the Rise

Sadly, Michael Terpin is not alone in his cryptocurrency woes. SIM swapping is becoming more prevalent as people increasingly put their entire lives on their cell phone.

SIM swapping made headlines just a few months ago when it was revealed that at least 3 people at Consensus 2018 were victims of such a crime. 20-year-old Joel Ortiz of Boston was arrested after the conference, and authorities believe he had hijacked 40 cell phone numbers. His earnings from his criminal endeavors is reportedly $5 million.

Just last week, 25-year-old Ricky Joseph Handschumacher was arrested for grand theft and money laundering by Florida police. Handschumacher was the leader of a hacker group that specialized in SIM swapping. In one case, they stole 57 bitcoins (worth over $358,000) from a victim.

Of this new trend, security researcher Brian Krebs notes:

In some cases, fraudulent SIM swaps succeed thanks to lax authentication procedures at mobile phone stores. In other instances, mobile store employees work directly with cyber criminals to help conduct unauthorized SIM swaps, as appears to be the case with the crime gang that allegedly included Handschumacher.

Have you been the victim of SIM swapping? Let us know in the comments below.

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