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AT &T faces lawsuit after SIM swap attack led to $560,000 loss in crypto

at-&t-faces-lawsuit-after-sim-swap-attack-led-to-$560,000-loss-in-crypto

US telecom giant AT &T is facing another lawsuit after a customer lost a large amount of crypto in a SIM swap attack.

The scammer robbed the customer of 159.8 ETH

Plaintiff Jamarquis Etheridge, a Texas resident, filed the lawsuit on September 15 with District Court. Etheridge alleges that AT &T failed to implement reasonable and appropriate safeguards to prevent unauthorized access to his wireless account. The reason for the lawsuit is that the malicious actor managed to gain unauthorized access to Etheridge’s wireless account and drain his cryptocurrency account on September 10. AT &T was slow to respond and could not stop the security breach until the next day.

Plaintiff, who has been a customer of AT &T since 2009, was unable to use his cell phone number to contain the attack and ultimately lost 159.8 in ETH worth approximately $560,000 at the time. According to the complaint, AT &T was aware of the threat and even posted warnings but did not do enough to protect this customer.

What is a SIM swap attack?

The attack, known as SIM swapping, is a form of fraud that exploits the phone’s authentication. The scammers typically find the victim’s cell phone number from online data, social media, or even a stolen device, then calls the provider, in this case AT &T, and impersonate the victim, using other personal information that can often be found online.

The scammer then asks the provider to activate a new SIM in their possession and proceeds to port the victim’s number to the new SIM. They can then access financial accounts such as crypto exchanges that rely on phones for authentication methods such as one-time SMS passcodes.

Not the first time AT &T was not able to protect its customers

It is not the first time that AT &T is facing being sued for this particular reason. A crypto investor named Seth Shapiro sued AT &T in December 2019 after losing $1.8 million in crypto in a similar SIM swap attack and an alleged failure by the operator to protect its customers. Another SIM swap victim, Michael Terpin, claimed he lost $24 million in cryptocurrencies in 2018 in a similar attack due to AT &T’s negligence. In November of that year, the California-based Robert Ross lost $1 million worth of cryptocurrencies after a hacker managed to control his AT &T phone.

The telecom giant has fought back against previous lawsuits and will likely do the same with this latest one.

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