A federal judge in California has rejected a bid by AT&T to throw out a lawsuit implicating the telecom giant in a SIM swap incident. The lawsuit alleged that the company was negligent in its duties, which led to the swap and the consequent theft of $1.8 million worth of digital currencies.
U.S. District Judge Consuelo Marshall rejected the telecom’s bid on May 18, allowing the lawsuit to proceed as scheduled. The judge ruled that the claims of negligence brought by the plaintiff Seth Shapiro be left intact, Law360 reported. Shapiro has to file an amended complaint before May 29, the report revealed.
Shapiro filed a lawsuit against AT&T back in October 2019. He alleged that AT&T employees from Arizona were complacent and worked with the criminals, feeding them important information that made the swap possible.
Shapiro, who is an executive at blockchain startup VideoCoin, lost $1.8 million worth of digital currencies after the criminals accessed his wallets in KuCoin, HitBTC, Bittrex, Coinbase, Huobi and other exchanges. And while he did report immediately after he lost the funds, it was over a year later before the relevant authorities took notice.
Ever since he filed the lawsuit, AT&T has fought to discredit him and have the case dismissed. The company has all along refused to accept blame for the incident. It has instead sought to shift the blame to Shapiro, claiming that he should have done more to protect his digital currency wallets.
The rejection of the dismissal bid will serve a significant blow to AT&T at a time when it’s fighting off multiple lawsuits from digital currency investors. Its biggest headache yet is a lawsuit filed by Michael Terpin who lost $24 million worth of digital currencies in similar circumstances. Terpin sued the company for $200 million claiming negligence.
AT&T filed a motion to dismiss Terpin’s lawsuit in April. Just as with Shapiro, the company claimed that Terpin should have taken further measures to secure his digital currency wallets.
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