Crypto Investor Sues AT&T for Alleged Role in $24 Million SIM Swap Fraud

Michael Terpin, a well-known cryptocurrency investor, has resumed his legal fight against AT&T, claiming the company neglected to protect his data. This failure led to a loss of $24 million in cryptocurrency due to SIM swap hackers in 2018.

Huge Implications You Should Know

This case, which started in 2020, could significantly increase the responsibility of phone companies in SIM swap incidents. In the summer of 2018, Ellis Pinsky, then a teenager, contacted an AT&T employee and bribed him to access Terpin’s SIM card.

This breach allowed Pinsky to bypass two-factor authentication and gain access to Terpin’s crypto wallet, where he stole $24 million worth of cryptocurrency. Because of his actions, Pinsky quickly earned the nickname “Baby Al Capone,” despite his young age.

Legal Implications for Telecom Companies

The case took a turn when the Ninth Circuit Court of Appeals supported Terpin’s argument under Section 222 of the Federal Communications Act, which protects user data. Other lawsuits filed by Terpin, including claims of fraud and $216 million in punitive damages, were dismissed. Now, Terpin is seeking $24 million from AT&T, plus an additional $14 million in interest and attorney’s fees.

Earlier, Terpin won a $75.8 million judgment against Pinsky’s associate, Nicholas Truglia, in 2019. Pinsky has since repaid $2 million of the stolen funds and has agreed to cooperate as an informant in Terpin’s case against AT&T.

The Rising Threat of SIM Swap Scams

The implications of this case go beyond Terpin’s personal loss. They highlight a growing threat in the cryptocurrency world—SIM swap scams. This troubling trend shows us the risks and complexities involved in cryptocurrency investments and the ownership of digital assets.

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