AT&T asks court to dismiss $200M claim in SIM-swap case

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Communications giant AT&T has again reached out to the court to request the dismissal of an outstanding claim for $200 million in punitive damages, following allegations of its involvement in a digital currency SIM-swapping scam.

The case concerns notable digital currency investor Michael Terpin, who claims to have lost $24 million in digital currency to an alleged scam back in 2018. The court case alleges this was the result of AT&T negligence, a claim the telecoms company continues to deny.

Responding to an amended filing by Terpin, AT&T asked for two of eight claims to be dismissed, and asked the court to disregard the claim for punitive damages. An AT&T representative was quoted by Cointelegraph saying, “Fraudulent SIM swaps are a form of theft committed by sophisticated criminals. It is unfortunate that these criminals targeted Mr. Terpin, but we dispute his allegations and will continue to fight them in court.”

In a hearing on March 30, lawyers for AT&T said Terpin has failed to demonstrate AT&T was guilty of deceit, either by misrepresentation or by concealment.

“Mr. Terpin ignores the undisputed fact […] that AT&T disclosed to him that it could not guarantee that third parties would not take unauthorized actions that would disclose his personal information.”

“Mr. Terpin’s deceit and misrepresentation claims seek to punish AT&T not for concealing or misrepresenting material facts, but simply for failing to provide further specifics on how Mr. Terpin’s information could be stolen.”

In 2017, hackers gained access to Terpin’s phone number through a SIM-swapping scam, allowing them to gain access to digital currency wallets secured to the device.

After this initial fraud, Terpin was placed on a “higher security level with special protection” following a meeting with representatives of AT&T.

In 2018, the same type of attack was carried out against Terpin again, allegedly as a result of the negligence of an AT&T staff member. As a result, Terpin brought the case for recovery of the funds, which he claims were in the value of $24 million.

The court will now weigh up whether AT&T’s request to dismiss the case is upheld. It serves as a further reminder of the importance of digital currency wallet security, to avoid scams and other fraudulent practices.