U.S. Investor Sues AT&T for $224 Million Over Cryptocurrency Losses

By Gertrude Chavez-Dreyfuss

NEW YORK – Michael Terpin, a U.S. entrepreneur and cryptocurrency investor, has initiated a lawsuit against telecommunications company AT&T, seeking $224 million in damages. The lawsuit alleges fraud and gross negligence surrounding the theft of digital currency tokens from his personal account.

In a detailed 69-page complaint submitted to the U.S. District Court in Los Angeles, Terpin claims that his tokens were stolen on January 7, 2018, through what he describes as a "digital identity theft" involving his cellphone account. He asserts that AT&T was his service provider at the time of the incident.

An AT&T spokesperson responded by stating, "We dispute these allegations and look forward to presenting our case in court."

At the time of the theft, the three million stolen tokens were valued at approximately $23.8 million. In addition to the initial amount, Terpin is pursuing $200 million in punitive damages.

The complaint also highlights that AT&T had previously been alerted by law enforcement regarding such fraud schemes.

Currently, cryptocurrencies hold a market capitalization of about $200 billion, with over 1,800 digital currencies emerging since the inception of Bitcoin nine years ago.

Represented by the Los Angeles-based litigation firm Greenberg Glusker, Terpin claims that the perpetrators of the theft subsequently gained control over his cellphone account by transferring it to an international criminal organization.

Notably, Terpin co-founded BitAngels, the first angel group for Bitcoin investors, in early 2013, and later launched the BitAngels/Dapps Fund, the first digital currency fund, in March 2014. He also serves as a senior advisor to Alphabit Fund, a prominent digital currency hedge fund.

The lawsuit states that the token theft was executed through a method known as SIM swap fraud. This technique involves deceiving a mobile provider into transferring a subscriber’s phone number to a SIM card that is under the control of an unauthorized individual. Once in possession of the phone number, the fraudster can reset passwords and access the victim’s online accounts.