Veritaseum is suing T-Mobile, the third largest mobile operator in the United States, for failing to prevent a hack that resulted in a loss of $ 8.6 million in crypto assets.
New York-based cryptocurrency company Veritaseum and its CEO Reggie Middleton filed a complaint against T-Mobile on Tuesday , accusing the company of “gross negligence” and failure to protect its customers.
Veritaseum operates a P2P trading platform that enables users to trade digital assets directly. The company held an ICO in 2017, but last fall, the New York District Court ruled to seize more than $ 8 million from Middleton from an unregistered token sale.
Shortly after the ICO, in July 2017, Veritaseum warned investors that hackers had stolen 36,000 tokens, equivalent to $ 8.6 million at the current exchange rate, and quickly sold them on exchanges. According to the company’s complaint, hackers gained control of Middleton’s phone as a result of SIM card fraud.
Attackers not only gained access to confidential information, such as passwords, they could also bypass two-factor authentication and withdraw all cryptoassets from Middleton wallets. Veritaseum’s complaint says T-Mobile has confirmed up to five unauthorized SIM card replacements, including months after the first attack warning.
Veritaseum claims that T-Mobile’s “gross negligence” led to the break-in and caused serious damage to Middleton’s mental health. The company accuses the telephone operator of failing to protect its customer, causing moral damage and negligence. Veritaseum and Middleton are demanding a jury trial and are suing for damages.
Stealing cryptocurrencies through SIM fraud is not uncommon. So, in June, the US Department of Justice accused a California student of SIM card fraud and theft of cryptocurrencies from an investor in New Orleans, as well as 27 other similar crimes.
In addition, crypto investor Michael Terpin, also a victim of cell phone scams, wrote an open letter to the chairman of the Federal Communications Commission (FCC) last fall . He demanded that the regulator take decisive action against SIM card fraud.