AT&T Faces Renewed Legal Battle Over $24 Million Cryptocurrency Theft

Telecommunications giant AT&T is once again facing court proceedings regarding its role in the theft of $24 million in cryptocurrency from Michael Terpin, founder of the bitcoin investor group BitAngels, through SIM card swapping. The relevant ruling was issued by the Ninth Circuit Court of Appeals.

The incident occurred in 2018 when 15-year-old hacker Ellis Pinsky, along with 21-year-old accomplice Nicholas Truglia, bribed an AT&T employee to swap Terpin’s SIM card. This allowed them to bypass the two-factor authentication protecting one of the crypto investor’s wallets.

Initially, Terpin filed 16 charges against the mobile operator, but only three were considered and subsequently dismissed.

Upon review, the judicial panel upheld the decision on two counts—fraud by AT&T and Terpin’s claim for $216 million in punitive damages.

The complaint based on Section 222 of the Federal Communications Act regarding AT&T’s failure to protect user information was deemed valid.

According to Terpin’s lead attorney, Pierce O’Donnell, his client will seek at least $45 million from the mobile operator, including $24 million in damages, $14 million in interest, and legal fees.

Immediately following the incident, Pinsky returned $2 million of the stolen amount. In October 2022, as part of a civil lawsuit, he agreed to return the remaining $22 million without admitting guilt or facing criminal charges. The hacker will also testify in Terpin’s favor in the case against AT&T.

On-chain detective ZachXBT supported the new lawsuit, emphasizing the responsibility of telecommunications companies in SIM swapping cases. According to his statistics, from April to August 2023, 54 such attacks resulted in the theft of over $13.3 million.

Hopefully Terpin see some success against ATT as US telecom companies need to be held accountable for all of these SIM swaps…. https://t.co/4uXB0PGqY6

— ZachXBT (@zachxbt) October 3, 2024

Back in 2019, Terpin filed a lawsuit against Pinsky’s accomplice Nicholas Truglia for $75.8 million and won the case.