AT&T back in court over $24M SIM swap crypto heist

Telecommunications giant AT&T is facing renewed legal challenges in a case linked to a SIM swap hack. A federal appeals court revived a lawsuit where a customer lost over $24 million in crypto after the company allegedly let hackers gain control of a phone number linked to their crypto accounts.

The legal battle began in 2020 when a crypto investor Michael Terpin sued Ellis Pinsky, accusing him of stealing $24 million worth of crypto through a SIM swap. However, Pinsky, just 15 at the time, allegedly bribed an AT&T employee to transfer Terpin’s SIM card information. This allowed him to bypass the two-factor authentication for Terpin’s crypto wallet.

$24M SIM swap hack case revived

As per the filings, plaintiff Michael Terpin had claimed that the Federal Communications Act survived dismissal as he raised a triable issue. The lawsuit will examine whether AT&T gave a hacker access to information protected by the act when it enabled the hacker to perform a “SIM swap”.

This complex case earned Pinsky the nickname “Baby Al Capone.” The Ninth Circuit Court had recently upheld several rulings in AT&T’s favor. However, the court reinstated a key claim under Section 222 of the Federal Communications Act.

This suggests that Terpin can continue to pursue $24 million in damages, plus interest and attorney’s fees which turns out to be around $45 million from the communication giant.

Michael Terpin has previously sued alleged hacker Ellis Pinsky for $71.4 million. Pinsky had returned around $2 million. The crypto investor won a $75.8 million lawsuit in 2019 against Baby Al Capone’s accomplice, Nicholas Truglia.

Pinsky is now a New York University graduate. He had reportedly agreed to testify against AT&T in the ongoing case. This move could heavily impact the legal scope of telecom companies.

Sim swap hacks have become a problem 

On-chain sleuth, ZachXBT commented on the matter. He stated that, hopefully, Terpin will see some success against AT&T. He suggested that US telecom companies need to be held accountable for all of these SIM swaps.

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

He referred to an investigation from August 2023, where he revealed that more than $13.3 million was stolen in 54 SIM swaps targeting the crypto community. He mentioned that when an account is compromised scammers try to create a sense of urgency with a fake claim to drain your assets.

ZachXBT advised never to use SMS 2FA and advised people to opt for an authenticator app or security key to secure accounts.