Mobile network T-Mobile is being sued by the CEO of a digital currency company over $8.7 million in digital currency lost to an alleged SIM-swap scam.
Veritaseum CEO Reggie Middleton accused T-Mobile of enabling the scam, despite him instantly notifying the mobile network of the scam and a number of recurring incidents in the same year, 2017. Since then, Middleton said he was subsequently hacked again in 2018 and 2019.
According to the lawsuit, T-Mobile is accused of having “abjectly failed” to protect its customers’ personal information.
“As a result of T-Mobile’s gross negligence in protecting plaintiffs’ information, its negligent hiring and supervision of T-Mobile employees who were responsible for safeguarding that information, and its violation of laws that expressly protect the information of wireless carrier customers, plaintiffs lost $8.7 million in cryptocurrency.”
The complaint goes on to explain that Middleton “suffered and continues to suffer severe anxiety, fear, and emotional distress relating to the repeated instances of identity theft.”
SIM-swap scams targeting digital currency are prolific, with hackers attempting to take control of a SIM over to a phone they control. Often aided by unsuspecting employees, the hacker then uses the SIM to gain access to sensitive accounts, including online banking and digital currency wallets.
Yet despite the growth in these types of attacks, other mobile networks are subject to ongoing legal proceedings for similar alleged failings. AT&T is currently embroiled in two separate lawsuits relating to stolen digital currency from alleged SIM-swaps.
The move comes after Middleton and Veritaseum settled with the U.S. Securities and Exchange Commission (SEC) over fraud charges last November, with $9.4 million handed over to regulators relating to an initial coin offering (ICO) held by the company back in 2017.
It remains to be seen whether the matter will proceed to court, and whether Middleton can expect relief for the digital currency he alleges was stolen.
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