Mobile network AT&T intends to defend allegations made by a customer regarding its alleged role in a SIM swap scam said to have resulted in significant losses in cryptocurrency.
The network was implicated by Seth Shapiro, head of strategy at VideoCoin, who said the network should have done more to secure his phone during a hack back in May 2018.
As a result of the hack, Shapiro is said to have lost $1.7 million through a SIM swap scam. However, according to reports, AT&T will now defend the action in court, after refusing to accept liability or settle ahead of trial.
The news means the case is now likely to proceed further to trial, unless the parties can reach some pre-trial accommodation.
AT&T spokesperson Jim Greer told CoinDesk the firm did not accept responsibility for the scam, and said AT&T had no role to play in protecting Shapiro’s device: “It is unfortunate that Mr. Shapiro experienced this, but we dispute his allegations. We look forward to presenting our case in court.”
According to Shapiro, hackers managed to take control of his phone through an elaborate SIM swap scam, allowing them to reset his email address and gain access to his crypto exchange accounts.
This resulted in the theft of $1 million from him, with the remaining balance stolen from other investors who had provided capital to Shapiro ahead of upcoming investments.
Greer said that phone authentication protection was not enough, and urged all smartphone users to take further steps to protect their accounts.
Recent high profile cases reinforce the importance of businesses and consumers taking steps to protect against SIM swap fraud, such as not using mobile phone numbers as the single source of security and authentication.
Pointing to the risks of SIM swapping, which tends to target notable individuals within the crypto community, Greer said the only alternative was secure offline storage.
He noted, “For cryptocurrency, security experts recommend further safeguards, such as keeping cryptocurrency in ‘cold storage,’ an offline environment that can’t be accessed via the internet, and following instructions regarding storage of wallet and exchange access credentials.”
The decision means the case will now likely be heard in court, pending any change of heart from Shapiro along the way. It serves as a further reminder of the need to be mindful of security and hacking risks when storing cryptocurrency.
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