Reggie Middleton, the CEO of cryptocurrency company Veritaseum, sued telecommunications provider T-Mobile for allegedly stealing $ 8.7 million in cryptocurrency in a series of SIM swap attacks.
According to files released on July 22 Middleton was the first target for SIM exchangers in July 2017. Despite the immediate reporting of the incident to T-Mobile Middleton claims to have been the victim of four successful SIM exchanges and further attacks in 2018 and 2019 later in 2017..
The lawsuit accuses T-Mobile of having “bitterly failed” in its responsibility to protect its customers’ personal and financial data.
What is a SIM swap attack?
SIM swap attacks are carried out by a hacker with the helpgenerally involuntarily, by an employee of a telecommunications providerthat reassigns the target’s SIM card to a phone under the control of the hacker.
Once the SIM control is secured, the attacker tries to access confidential accounts that are controlled by the victimsuch as emails, online banking and wallets or cryptocurrency accounts.
Middleton’s lawyer says:
“As a result of T-Mobile’s gross negligence in protecting the plaintiffs’ information, their negligent hiring and monitoring of T-Mobile employees who were responsible for the protection of this information, and their violation of laws that expressly protect customers the mobile operator has lost plaintiffs $ 8.7 million in cryptocurrencies. ”
The lawsuit adds that Middleton “has suffered from and continues to suffer from serious fears, fears and emotional stress associated with repeated cases of identity theft”.
In November, Middleton and Veritaseum have resolved fraud related to the company’s Initial Coin Offering (ICO) for 2017 and they paid $ 9.4 million to the United States Securities and Exchange Commission (SEC).
Telecommunications companies are facing legal steps
Lawsuits against telecommunications providers for allowing SIM swap attacks have increased over the past yearATT is currently facing at least two lawsuits from cryptocurrency investors for failing to prevent the attacks.
In addition to the lawsuit against ATT, the founder and pioneer of BitAngels, Michael Terpin has filed a civil suit against an 18-year-old boy for planning the attacks that resulted in the loss of nearly $ 24 million in cryptocurrencies.
In June, A 20-year-old Californian has been charged with his role in 28 SIM swap attacks.