US telecommunications colossus AT&T has been issued with a $224m lawsuit after an investor in cryptocurrency accused the US operator of engaging in fraudulent and gross negligence in relation to the theft of digital currency.
The investor at the centre of the controversy is Michael Terpin, and he is alleging that the digital currency tokens he owned were stolen from his mobile phone account, for which AT&T is the service provider.
In the lawsuit he has tabled, he has described the action as 'digital identity theft'. Terpin is a well-known figure in the world of cryptocurrency and co-founded Bit-Angels, which is a group for investors in Bitcoin (the world's biggest cryptocurrency by value) in 2013, and established a digital currency fund in 2014.
The entrepreneur and investor is now claiming for 3 million tokens that were allegedly stolen from him that were worth around $2.8m, and an additional $200m in other damages.
According to the complaint document that was filed, AT&T has already been contacted by law enforcement authorities about similar frauds in the past. The co-founder of Bit-Angels claims the theft occurred through a SIM swap fraud, which involves tricking a provider, which in this case is the US mobile operator to transfer a phone number to a SIM card controlled by someone else.
The enables the fraudster to then use the phone number to reset subscriber passwords and access online accounts. In addition to this, Terpin also claims that after the theft, his AT&T account was transferred to an international criminal gang.
In an emailed statement sent to Reuters, AT&T vehemently refuted the claims being made: "We dispute these allegations and look forward to presenting our case in court," a representative stated.