Photo Credit To Mike Mozart Via Flickr
Michael Terpin, a US-based entrepreneur and crypto investor recently sued AT&T for fraud and negligence. Terpin claims that negligence by the company led to him losing millions of dollars in crypto. He says that the crypto was stolen from his account after SIM swap fraud. In his lawsuit, Terpin expects to receive about $24 million and an additional $200 million in punitive damages. However, AT&T disputes these allegations.
How SIM Swap Fraud Occurs
A SIM hijacking attack occurs when your phone number is moved to a new SIM card without approval or authorization. With this phone number, hackers can easily take over a digital account. First, the hackers call the phone company and pretend to be the target. They claim to have lost their SIM card and request for their number to be moved to a new SIM card they have. With some few key details about their victim, they are able to convince the phone company that they are the person they claim to be. At this point, the employee moves the number to the new SIM and it is game over for their victim.
Terpin’s is Winning His Case
In his lawsuit, Terpin did not specify which Cryptocurrencies were stolen. However, he recently won his first victory when the court refused to dismiss the lawsuit. In his ruling, an LA federal Judge ruled that AT&T had to respond to the lawsuit.
According to Terpin, this was the second time he had lost crypto to a SIM swap scam. He claims that he had called AT&T and told them his account was high risk and they should create extra security measures. Thus, the judge ruled that the acts by a fraudulent third party were reasonably foreseeable by the company. However, the judge cast aspersions on Terpins’ claim of losing about $24 million. He explained that Terpin did not provide evidence on how he allegedly lost $24 million in crypto. For instance, he said that Terpin did not explain whether the hackers stole the crypto and transferred the money or whether they moved the crypto to a cold wallet. However, Terpin was allowed to amend his claim within a 21-day period.
Terpin was quite happy about the ruling. This is not the first time that Terpin has had a victory in court concerning crypto. Early this year, he won a case against Nicholas Truglia of Manhattan. The 21-year old was ordered to pay $75.8 million to Terpin after he stole crypto from Terpin by gaining control of his phone number.
There Exists a Solution to SIM Card Fraud
The US is lagging behind when it comes to dealing the with SIM Card swap fraud. Many nations in Africa are far ahead when it comes to dealing with this kind of fraud. For instance, when customers change their number in Mozambique, the bank is notified and any attempted transaction within two days is blocked. This method is simple by effective. The country has seen SIM swap fraud for financial services drop to nearly zero. US telcos have been slow to adopt this model However, the may soon have to change their ways if Terpin wins his case.
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