AT&T Fails to Win Dismissal in $24 Million Crypto SIM-Swap Lawsuit

Crypto investor Michael Terpin has won an early victory in his attempt to sue telecom giant AT&T Mobility over a SIM-swapping hack that saw him lose a claimed $24 million.

In court documents published Friday, Los Angeles federal judge Otis Wright II ruled that AT&T must answer a lawsuit brought by Terpin for enabling the theft millions of dollars of cryptocurrency by giving access to his SIM card to hackers.

While the telco had requested that the court dismiss the lawsuit in its entirety, the judge decided that AT&T should answer to Terpin's claims of violation of the Federal Communications Act, breach of contract, and other legal violations.

Terpin is seeking $23.8 million in compensatory damages and a further $200 million in punitive damages.

The case was first brought in August 2018, with Terpin claiming that AT&T's employees have been complicit in a SIM swap fraud.

Adding insult to injury, this was said to be the second time Terpin had suffered a SIM swap hack via AT&T, and he claims to have specifically told the firm that his account was high-risk and set up extra levels of security after the first incident.

While the company sought dismissal on the ground that the claim was not ripe for litigation, Judge Wright said Terpin had sufficiently alleged the claim and ruled out the motion to dismiss.

"Based on the allegations of the Complaint, Mr. Terpin asserts that AT&T assisted the hackers with a SIM card swap, thus granting the hackers access to Mr. Terpin's phone number. This allegedly resulted in Mr. Terpin losing $24 million in cryptocurrency. However, Mr. Terpin does not explain how the hackers accessed Mr. Terpin's cryptocurrency account(s), whether they sold Mr. Terpin's cryptocurrency then transferred the money, or whether they transferred the cryptocurrency to a cold wallet. At this stage, the Court is left to speculate how having access to Mr. Terpin's phone number resulted in the theft of cryptocurrency."

"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," said Terpin's lead counsel, Pierce O'Donnell, in a press release.

Back in May, Terpin won another case brought against the perpetrator of the $24 million SIM hack.