Michael Terpin, who is the co-founder and CEO of the Transform Group, says that in 2018 his phone was hacked and $24 million of Bitcoin was stolen. Terpin says that a group of 20 teenagers led by Ellis Pinsky were responsible. In 2018, Pinsky was only 15 years old.
Terpin says that the Pinsky’s gang was able to get to his data by a “SIM swap”. When a phone is under the condition of a “SIM swap”, all of the victim’s cell phone service, such as voice calls, SMS text messages, etc. is redirected to the attacker. A “SIM swap” lets an attacker get the SMS text message that is the last step in a two-factor authentication.
Pinsky’s gang was able to get AT&T, the mobile phone provider for Terpin, to transfer Terpin’s phone number. It is thought that Pinsky’s gang bribed an AT&T employee to do the unauthorized “SIM swap”. Pinsky’s gang was then able to access Terpin’s online accounts and get copies of the authentication messages. Pinsky’s gang then withdrew the $24 million in Bitcoin from Terpin’s account. This type of crime occurs frequently.
Pinsky is now 18 years old, which is the legal age of adulthood in the USA. Terpin has filed charges against Pinsky in a federal court in Manhattan, New York for fraud and racketeering. Terpin is asking for $72 million in damages. US Federal law for organized crime lets a victim get up to three-times the amount of the actual damage.
Terpin has also filed charges against AT&T Mobility in a Los Angeles, Californian court for $240 million in damages. Terpin says that AT&T’s inadequate information security methods let Pinsky’s gang get control of his mobile phone.