AT&T won’t be able to dismiss crypto-stealing lawsuit
By Bob Garcia
The mobile carrier can’t escape a lawsuit after a user lost millions from a SIM-swapping scam
There is an ongoing case in court against the giant telecom company AT&T due to a cryptocurrency theft that targeted Seth Shapiro in a SIM-swapping scam. The lawsuit accuses the company of negligence for failing to prevent this investor from losing $1.8 million worth of cryptocurrency during the heist. AT&T presented a motion to dismiss the case, arguing that it wasn’t responsible, and its plea fell to U.S. District Judge Consuelo Marshall. The judge has decided to let the case play out, and rejected the motion.
Shapiro accuses AT&T of negligence and negligent supervision, claims brought under the Computer Fraud and Abuse Act, and requests punitive damages, all of which were left intact as the lawsuit will continue to move forward. This lawsuit was first filed in December 2019, after Shapiro – an Emmy Award-winning media tech consultant who has previously worked for the likes of Disney and Showtime – reported a SIM-swap attack in which he was robbed of those funds. For him, AT&T failed due to security incompetence on its end.
According to how these SIM-swap attacks develop, they require the participation of employees from the telecom company. This means that an employee could deliberately, or unwittingly, reassign the victim’s account to a SIM controlled by the criminal, who is then able to gain access to information from the accounts that belong to the victim.
The first attack was reported in May 2018 in which an AT&T employee “noted the SIM swap activity in [Plaintiff’s] account and assured [Plaintiff] that his SIM card would not be swapped again without his authorization,” said the court order. “AT&T failed to implement sufficient data security systems and procedures and failed to supervise its own personnel, instead of standing by as its employees used their position at the company to gain unauthorized access to Mr. Shapiro’s account in order to rob, extort and threaten him in exchange for money,” Shapiro’s complaint stated.