A Los Angeles federal judge has ruled that AT&T Mobility can be held to answer a lawsuit from a customer who was lost $24 million worth of cryptocurrency when he became the victim of SIM-swapping.

AT&T Will Face Nine-Figure Lawsuit From Michael Terpin

The $224 million lawsuit was filed by BitAngels co-founder, Michael Terpin, who claims that the telecom giant enabled the loss of $24 million worth of cryptocurrency to SIM hackers during January 2018. As previously detailed by Terpin’s lawyers: “on January 7, 2018, [Terpin’s] phone with his AT&T wireless number went dead. As [Terpin’s] subsequent discussions with AT&T revealed, an AT&T employee on that date had ported over [Terpin’s] wireless number to an imposter.”

The honorable Otis Wright II rejected AT&T’s effort to dismiss the case on July 22, ruling in favor of Terpin’s claim that AT&T violated the Federal Communications Act by facilitating the hackers’ accessing of his account. Judge Wright stated:

“Mr. Terpin has sufficiently alleged that AT&T permitted unauthorized access to his proprietary information, specifically his account information and private communications.”

Terpin’s lead counsel, Pierce O’Donnell, stated that “Judge Wright strongly repudiated AT&T’s audacious bid to prevent Michael from demonstrating to a jury the carrier’s contempt for consumers’ privacy and utter disregard of its legal obligations to prevent this very type of SIM swap and financial crime.”

Mr. O’Donnell added that “the evidence will show that AT&T not once, but twice allowed hackers posing as Michael to obtain his SIM card.”

Terpin Among Numerous High-Profile Victims of SIM-Swapping Syndicate

Mr. Terpin was the victim of a group of SIM-swappers headed by Nicholas Truglia. Described as New York’s ‘Bitcoin Bandit’, Truglia and his approximately 24 associates are estimated to have stolen approximately $80 million worth of crypto assets from several high-profile actors within the cryptocurrency sector.

It is alleged that Truglia and his group obtained fraudulent identification documents, later using such to fool the support staff of telecommunications provider to port the phone numbers of their victims to devices under their control, allowing the interception of text messages and 2FA codes.

Truglia later boasted: “I’m a millionaire. I’m not kidding. I have 100 Bitcoin,” […] “Nobody can get me in trouble. Nobody can put me in jail. I would bet my life on it, actually.” Following his extradition to California during December 2018, Truglia was ordered to pay Terpin $75.8 million in compensation during May of 2019.

Terpin offered praise to Judge Wright regarding the ruling, stating: “I am grateful that Judge Wright is allowing my case to proceed.  We must hold AT&T accountable. If AT&T demonstrated the same zeal to totally revamp its porous security system as it does to suppress the damning evidence of its callous indifference to its customers, we would not be in court.”