Investor Sues AT&T For $224 Million For Cryptocurrency Loss

In light of the crypto-crash and ongoing cases of crypto-thefts, it was only a matter of time before a headline-grabbing lawsuit emerged. And sure enough, Reuters reports that entrepreneur and cryptocurrency investor Michael Terpin filed a $224 million lawsuit on Wednesday against AT&T, accusing the telecom giant "of fraud and gross negligence in connection with the theft of digital currency tokens from his personal account."

In the 69-page complaint filed with the District Court in Los Angeles, Terpin alleged that on January 7, 2018, the tokens were stolen from him through what he alleged was a "digital identity theft" of his cellphone account while AT&T was his service provider.

At the time of the theft, the three million stolen tokens were worth $23.8 million, the complaint said. Terpin is also seeking $200 million in punitive damages. Terpin also claims that AT&T had been previously contacted by law enforcement authorities about such frauds, but did nothing to prevent it.

The lawsuit alleges that the theft of the tokens occurred through what is called a SIM swap fraud.

SIM swapping consists of tricking a provider into transferring a subscriber’s phone number to a SIM card controlled by someone else. Once that person gets the phone number, it can be used to reset the subscriber’s passwords and access online accounts.

Terpin said that after the theft of the digital currency, his cellphone account was transferred to an international criminal gang (it remains to be seen if Russians are implicated).

Terpin, a pioneer in the crypto space, co-founded the first angel group for bitcoin investors, BitAngels, in early 2013, and the first digital currency fund, the BitAngels/Dapps Fund, in March 2014. He is a senior advisor to Alphabit Fund, one of the world’s largest digital currency hedge funds. Which means he is not be having a good year, and probably explains why he waited until Bitcoin hit its 2018 lows before finally deciding to sue.

For its part, AT&T denied everything and told Reuters that "we dispute these allegations and look forward to presenting our case in court."