Federal Judge Dismisses Claims Against Telecom Giant AT&T in Crypto Theft Case

By Prashant Jha

According to recent reports, the federal judge responsible for the long-drawn-out Terpin Vs. AT&T, the legal feud regarding the SIM swapping and crypto theft case, has dismissed the motion to try out the case against telecom service provider AT&T.

As we have reported earlier, Terpin had filed a lawsuit against AT&T in August 2018 because he felt that the it was the telecom major’s neglect that had led to crypto hackers gaining access to his phone number. The hackers had then used the number to carry out a high-volume crypto theft, which has gone down in crypto history as one of the most sensational heists to have occurred. In the early part of July 2019, the supervising federal judge involved in the case also turned down AT&T’s motion for a dismissal of the case.

The judge essentially dismissed all causes of action in the entire complaint, leaving aside only a declaratory judgement claim, with a leave to amend in twenty days. The court has apparently concluded that even though the plaintiff, Terpin, had not been wrong in claiming that AT&T had some responsibility in allowing such a criminal act to happen, “Mr. Terpin fails to sufficiently allege proximate cause. Mr. Terpin does not connect how granting the hackers/fraudsters access to Mr. Terpin’s phone number resulted in him losing $24 million.”

Stephen Palley, a lawyer, reportedly stated with regard to the case that:

“I suspect that Plaintiff will be able to overcome the pleading defect in an amended pleading.”

Palley also went on to say that even though the reason behind this court dismissal can be taken care of with a possible amendment, it is still uncertain as to whether or not AT&T will successfully defend itself by arguing how the actual damages in the case had been perpetrated by third party criminal masterminds who were in no way affiliated to the telecom company. He further commented:

“It does seem rather astonishing that a sophisticated crypto holder would leave this much crypto on an exchange, continuing to use SMS two-factor authentication with a phone that had already been compromised. This isn’t to excuse AT&T but, well, you can see the argument they will make.”

Indeed his logical reasoning seems solid, considering how the need to secure crypto wallets is harped upon in just about every blog or thread about crypto. If it is AT&T’s fault, Terpin must also take some responsibility, no matter how little considering that he opted for a scheme of security rarely considered robust in crypto circles.