Judge Rules that AT&T Not Guilty of SIM-Swapping case in $24M cryptocurrency Loss

A legal battle involving stolen cryptocurrency through sim swapping that has been going on for over a year now had its motion dismissed by the federal judge chairing it.

The case involving Terpin vs. AT&T had previously been reported in August last year. Terpin had filed a lawsuit against AT&T since he believes the telecommunications giant had equipped hackers with the means to access his phone number, which led to a significant crypto rip off. At the beginning of this month, the judge overseeing this case had issued an injunction against the telecoms giant motion for discharge.

AT&T won’t be blamed

According to the report, the judge has dismissed every pending claim to the complaint except a declaratory judgment claim, giving the complainant 20 days to amend it.

The court found that, whereas the complainant was right that AT&T should have undertaken measures to anticipate such criminal acts, “Mr. Terpin fails to allege proximate cause sufficiently. He does not connect how granting the hackers/fraudsters access to his phone number resulted in him losing $24 million.” These are the comments of a lawyer, Stephen Palley, in the article.

“I suspect that the plaintiff will be able to overcome the pleading defect in an amended pleading,” Palley explains that, while the reason for this dismissal can be solved with a probable amend, it remains to be seen whether AT&T will be able to defend by pointing out that independent third-party criminal acts caused the damages. 

He went on and commented:

“It does seem rather astonishing that a sophisticated crypto holder would leave this much crypto on an exchange, continuing to use SMS two-factor authentication with a phone that had already been compromised. This isn’t to excuse AT&T but, well, you can see the argument they will make.”

In essence, the court agreed that the claim was a mere allegation and that AT&T wireless agreement was unwarranted and invalid as against public policy is ripe for arbitration. The plaintiff has been calling for the disbandment of the deal because it would require adjudication of the claim. If the plaintiff is not compensated for the damages, there is a likelihood that the agreement might be enforced where we will soon see a ruling. In that case, the plaintiff will be able to re-plead his complaint.