US-based mobile carrier AT&T is now facing a $224 million lawsuit over the theft of cryptocurrency, being accused of gross negligence and fraud, by cryptocurrency entrepreneur and investor Michael Terpin.
Terpin, the founder and CEO of Transform Group which has launched a number of high-profile ICOs including Ethereum, Golem and Gnosis, filed a complaint with the US District Court over the theft of three million coins in January 2018. At the time of the theft, the coins were worth over $24 million, and Terpin is looking to sue for an additional $200 million in punitive damages. AT&T responded to the complaint in an email to Reuters, saying that the telecommunications giant would “dispute these allegations” and “[present] their case in court.”
There has been a significant rise in SIM fraud as online crypto exchanges like Coinbase have seen drastic increases in clients. SIM fraud typically occurs when an attacker pretends to a customer, and contacts a carrier’s support service to have a phone number assigned to their own SIM. As long as the hacker provides some additional information (which can typically be found publicly), they gain access to the victim’s phone number, which can be used to gain access to online accounts. Hackers have begun to target known crypto holders, as blockchain transactions are permanent and often hard to track.
A writeup by Cody Brown on Medium published mid-2017 served as a warning to the crypto space – his Coinbase account was compromised through a similar attack through Verizon’s network, and he urged both the exchange and the carrier to make security changes to prevent such attacks. Since then, most exchanges and online wallets require customers to enable 2FA on their accounts using TOTP systems like Google Authenticator, as it is significantly harder to gain access to accounts where a third-party is not involved in authentication.
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