T-Mobile Sued After Client Lost $8.7 Million in Cryptocurrency Hack

August 12, 2021 Author: Brian Levin
Cryptocurrency tracking

Lawsuit Alleges Gross Negligence in SIM Card Swapping Scheme

T-Mobile is facing a multi-million dollar lawsuit after hackers were able to gain unauthorized access to a client’s account. Using information provided by the cellular company, hackers successfully bypassed their two-factor authentication security measures enabling them to obtain a SIM card with the client’s personal and financial information. $8.7 million in cryptocurrency was ultimately transferred out of the customer’s account.

Levin Law, P.A. is investigating cryptocurrency losses related to a cellular company’s breach of security. Hackers are now targeting individuals who hold large amounts of cryptocurrency. Despite knowing the potential for fraud, many cellular companies have done little to protect their customers’ information. 

If your phone or mobile device was hacked and you have suffered cryptocurrency losses, possibly as a result of a cellular company’s data and security failures or other negligence, contact Levin Law for a free case evaluation. Call (305) 402-9050 or email managing partner Brian Levin directly at contact@levinlawpa.com

Gross Negligence and Reckless Disregard

In a lawsuit filed in the Eastern District of New York, cryptocurrency holder and founder of Veritaseum, LLC (“Veritaseum”), Reginald Middleton, alleges that cellular company T-Mobile  US, Inc. (“T-Mobile”) engaged in gross negligence by allowing hackers to repeatedly obtain access to his personal and financial information. Ultimately, the unauthorized access allowed the hackers to transfer $8.7 million in cryptocurrency assets out of his accounts. 

As noted in the complaint, Middleton is a well-known holder of cryptocurrency. He is the founder and sole owner of the cryptocurrency company Veritaseum, a named plaintiff in the lawsuit. Middleton utilized a mobile device using T-Mobile as a cellular provider for both personal and business use. Personal and financial information could be accessed through the device by an authorized user. 

In 2017, hackers attempted to gain access to Middleton’s mobile device multiple times through T-Mobile. After several tries, hackers were successful, conducting a SIM card swap. The SIM card contained valuable data that allowed hackers to access “his corporate and personal cryptocurrency addresses, wallets and online exchange accounts for holding cryptocurrency.” 

Failure to Protect Customer Information

Without the information provided by T-Mobile, hackers would have been unable to transfer millions of dollars in cryptocurrency assets out of Middleton’s account. The cellular company had been warned about the potential for this form of fraud by the Federal Trade Commission in 2016. Despite these warnings, the cellular provider did little to enhance their security measures.

The security breach occurred not just once but multiple times. Hackers were able to obtain unauthorized access to Middleton’s accounts five times. T-Mobile failed to take corrective action and exercised a “reckless disregard for the rights of customers.” 

SIM Card Swapping Schemes, also known as SIM Swap Scams, are on the rise. Cellular companies must provide a multi-factor authentication system to protect consumers from future fraud.

Contact Levin Law, P.A. for a Free Case Evaluation

If you have suffered cryptocurrency losses as a result of a cellular company’s security breach, contact Levin Law, P.A. for a free case evaluation. Depending on the situation, you might be entitled to financial compensation based on your losses. Call (305) 402-9050 or email managing partner Brian Levin directly at contact@levinlawpa.com.

Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay Levin Law’s attorney fees unless money is recovered on their behalf. 

About Levin Law

Levin Law is a premier national securities and class action law firm.  Brian Levin, Levin Law’s managing attorney, has obtained settlements and recoveries over $100,000,000 in assets through arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.