US Court Revives $24M AT&T SIM Swap Crypto Theft Case

The Ninth Circuit Court of Appeals in the United States has reopened a case against AT&T, the American multinational telecommunications firm whose employees facilitated a Subscriber Identity Module (SIM) swap that resulted in the theft of $24 million in cryptocurrencies in 2018.

A filing released by the court panel indicates that nearly all allegations against AT&T were appropriately dismissed by the United States District Court for the Central District of California, aside from a claim in which the plaintiff raised a triable issue under Section 222 of the Federal Communications Act (FCA).

Reopening of the Case Against AT&T

In 2018, 15-year-old Ellis Pinsky collaborated with 21-year-old Nicholas Truglia to bribe an AT&T employee, enabling them to transfer the information of cryptocurrency investor Michael Terpin’s SIM card to a new blank card on their phone. This SIM swap allowed them to bypass the two-factor authentication safeguarding Terpin’s crypto wallets, resulting in the theft of $24 million worth of crypto assets.

After discovering the theft, Terpin, who founded the global crypto incubator BitAngels, took legal action against AT&T and utilized his investigative skills to locate Pinsky. The teenager returned $2 million of the stolen funds. Terpin subsequently pursued Truglia in court the following year, seeking $75.8 million in damages, and emerged victorious. The court sentenced Truglia to 18 months in prison.

Additionally, Terpin pursued legal action against Pinsky after he turned 18 in 2020, seeking $71.4 million in damages. Eventually, the plaintiff struck a deal with Terpin to pay just $22 million and also agreed to testify in the case against AT&T.

Damages Reduced to $45 Million

In 2020, a judge in California dismissed Terpin’s claim for $216 million in damages against AT&T and 12 other claims, citing lack of legal standing. Judge Otis Wright allowed only three out of the 16 claims put forth by the crypto investor to proceed.

Earlier this year, Terpin appealed the California judge’s ruling. The Appeals Court panel has upheld the judge’s dismissal of several claims while partly affirming Wright’s summary judgment on charges filed after the hackers took control of Terpin’s phone.

Since the panel did not overturn Wright’s dismissal of Terpin’s request for $216 million in damages, the crypto investor is now pursuing $45 million from AT&T.

In another incident, a different cryptocurrency investor filed a lawsuit against AT&T in 2020 for facilitating cybercriminals in a SIM swap attack that resulted in the theft of $1.8 million worth of cryptocurrencies.