Arbitrating Crypto Theft Claims Against Crypto Exchanges

Contact our team to discuss your case against a cryptocurrency exchange.  Email: info@dilendorf.com; Phone: 212.447.9797.

I. Introduction

Cryptocurrency exchanges like Coinbase, Gemini and Binance have become an increasingly popular way for individuals and businesses to buy, sell, and trade cryptocurrencies such as Bitcoin and Ethereum.

These exchanges play an important role in the digital economy, providing a platform for users to transact with cryptocurrencies and facilitating the growth of the industry.

However, the use of cryptocurrency exchanges also presents a range of potential risks and disputes.

These can include security breaches, platform malfunctions, regulatory violations, and disputes over contract terms or transaction details.

When these issues arise, it is important for users to have a clear understanding of the process for resolving disputes with cryptocurrency exchanges.

Usually cryptocurrency exchanges choose a mandatory arbitration as a way for resolving disputes.

Arbitration offers an alternative to traditional, offering a faster, more cost-effective, and often more flexible process for resolving disputes.

Understanding the arbitration process, including the process of filing arbitration, the formal complaint process, discovery, applicable law, the standard of care, the process of establishing gross negligence claims, witnesses, and motion to compel practice, helps users navigate the dispute resolution process and ensure that their rights are protected.

II. The Arbitration Process

The arbitration process is a form of alternative dispute resolution that is often used in disputes involving cryptocurrency exchanges.

The process typically begins with the filing of an arbitration claim, which should outline the parties involved, the facts of the case, and the relief sought.

The arbitration process is typically less formal and more flexible than traditional litigation, with the arbitrator acting as a neutral third party who reviews case circumstances and evidence and makes a decision on the merits of the case.

Compared to litigation, arbitration has a number of advantages for resolving disputes with cryptocurrency exchanges.

The main advantage is that it is usually faster and less expensive, as it typically involves fewer procedural requirements and a more streamlined discovery process.

Additionally, arbitration awards are generally final and binding, providing parties with a degree of certainty in the outcome of their dispute.

However, there are also some potential disadvantages to arbitration. For example, the parties may have less control over the process and the outcome, as the arbitrator’s decision is final and cannot be appealed.

Additionally, the lack of formal procedural requirements can make it more difficult to ensure that all relevant evidence is presented and considered.

Ultimately, the decision of whether to use arbitration to resolve a dispute with a cryptocurrency exchange will depend on the specific circumstances of the case and the preferences of the parties involved.

III. Filing a Formal Complaint

Filing a formal complaint is an important step in the arbitration process for resolving disputes with cryptocurrency exchanges.

A formal complaint is a document that sets out the parties involved, the facts of the case, and the relief sought.

Its purpose is to provide the arbitrator with a clear understanding of the nature of the dispute and the specific issues that need to be resolved.

When filing a formal complaint, it is important to provide as much information and documentation as possible to support your claims.

This may include transaction records, communication logs, and any other relevant evidence. The more complete and well-supported your complaint is, the more likely it is to be successful in resolving the dispute.

To file a formal complaint it is necessary to follow the rules and procedures set out by the arbitration provider.

This may involve submitting the complaint electronically or by mail, paying any associated fees, and complying with any other requirements set out in the provider’s rules.

Once the complaint has been filed, the arbitrator will typically review it and may request additional information or evidence before proceeding to the next steps of the process.

IV. Applicable Law

Cryptocurrency exchanges are governed by a complex legal framework that includes a variety of federal and state laws and regulations. These laws cover a range of issues, including money transmitter regulations, consumer protection, anti-money laundering and cybersecurity regulations.

Applicable law plays an important role in arbitration, as the arbitrator will typically be required to apply the relevant laws and regulations to the dispute at hand. This can include federal and state laws governing contracts, torts, and other areas of law.

In cryptocurrency exchange disputes, there may be differences between state and federal law that can affect the outcome of the dispute.

For example, some states may have stricter consumer protection laws or more lenient cybesercurity regulations, which can impact the parties’ rights and obligations in the arbitration process.

It is important for parties to understand the relevant laws and regulations that apply to their dispute. Legal counsel who is familiar with these issues can ensures that such laws and regulations are adequately applied..

V. Establishing Gross Negligence Claims

Gross negligence refers to a level of carelessness or recklessness that goes beyond ordinary negligence and is often characterized by a disregard for the safety or well-being of others.

In arbitration, establishing a claim of gross negligence can be challenging, as it requires a high degree of evidence and proof.

To establish a claim of gross negligence in a cryptocurrency exchange dispute, the parties need to present evidence that demonstrates a willful or reckless disregard for the safety or well-being of users.

This may involve showing that the exchange failed to take reasonable steps to protect user information or assets, or that it knowingly engaged in fraudulent or deceptive practices.

Examples of gross negligence in the context of cryptocurrency exchanges could include failing to implement basic security measures, such as two-factor authentication or encryption, or failing to adequately protect user data from hacks or data breaches.

Other examples could include knowingly misrepresenting the safety or security of the exchange, or engaging in fraudulent or deceptive practices to manipulate the market.

Establishing gross negligence in a cryptocurrency exchange dispute is a complex process that usually requires the assistance of legal and technical experts to present the necessary evidence and arguments.

VI. Standard of Care

The standard of care refers to the level of care and diligence that is expected of a party in a given situation.

In arbitration, the standard of care is an important factor in determining whether a party has acted negligently or breached its obligations in a cryptocurrency exchange dispute.

In the context of cryptocurrency exchanges, the standard of care may be influenced by a variety of factors, including industry best practices, regulatory requirements, and the expectations of the parties involved.

For example, a cryptocurrency exchange may be held to a higher standard of care if it operates in a highly regulated jurisdiction or if it advertises itself as providing a high level of security or protection for its users.

To establish the standard of care in a cryptocurrency exchange dispute, the parties have to present evidence related to industry standards, regulatory requirements, or other relevant factors that can help to establish what level of care was expected in the particular circumstances of the case.

This may involve expert testimony or other forms of evidence to support the parties’ claims and arguments.

Ultimately, the arbitrator will make a determination about the appropriate standard of care based on the evidence presented and the relevant legal and regulatory frameworks.

VII. Discovery

Further step in arbitration is discovery. Discovery refers to the process of gathering and exchanging information and evidence in preparation for arbitration.

The purpose of discovery is to allow each party to obtain the information they need to strengthen their case arguments and to prevent any surprises or ambushes during the arbitration process.

In arbitration, there are several types of discovery available, including document requests, interrogatories, and depositions.

Each type of discovery allows parties to gather information in different ways, such as through written responses, oral testimony, or the production of documents or other materials.

In cryptocurrency exchange disputes, discovery is extremely important because of the technical and complex nature of the issues involved.

For example, parties may need to request information related to security protocols, blockchain transactions, or other technical aspects of the exchange’s operations in order to make their arguments.

Without the ability to obtain this information through discovery, parties may be at a disadvantage in the arbitration process.

As such, discovery plays a critical role in ensuring that each party has a fair and equal opportunity to present their case and to reach a just resolution.

VIII. Witnesses

In arbitration, witnesses can play a crucial role in presenting evidence and testimony to support a party’s case.

Witnesses may include individuals who have direct knowledge of the dispute or relevant events, such as employees of the cryptocurrency exchange or other industry experts.

In a cryptocurrency exchange dispute, witnesses may be called upon to provide testimony related to issues such as security protocols, transactional data, or other technical aspects of the exchange’s operations.

To prepare and present witness testimony effectively in arbitration, parties must carefully review the facts and evidence of the case, and work with their legal team to develop a clear and compelling narrative that supports their position.

This may involve preparing direct and cross-examination questions, coordinating with expert witnesses, and ensuring that all relevant documentation and evidence is properly introduced and explained.

Presenting strong and credible witness testimony helps to build a compelling case and increase the likelihood of a favorable outcome in arbitration.

IX. Motion to Compel Practice

A motion to compel is a legal request that require another party to comply with a discovery request or other legal obligation.

The purpose of a motion to compel is to ensure that parties are fulfilling their obligations to provide information and evidence relevant to the dispute.

In a cryptocurrency exchange dispute, a party may file a motion to compel if the other party has not provided requested information or has otherwise failed to comply with the rules of the arbitration.

To file a motion to compel, the party needs to provide the request for information and evidence of the other party’s failure to comply.

However, in response to a motion to compel, the other party may argue that the request is overly broad or burdensome, or that the requested information is not relevant to the dispute. The arbitrator reviews the motion and decides whether to issue an order requiring compliance with the request or deny the motion. A motion to compel can be an effective tool for ensuring that parties are meeting their obligations to provide information and evidence, and helps to ensure a fair and efficient arbitration process.

X. Conclusion

In conclusion, understanding the arbitration process is crucial for parties who may encounter disputes with cryptocurrency exchanges.

To effectively prepare for and navigate this process, it is important to gather and organize all relevant information and documentation, including financial statements, contracts, and communication records.

Parties should also take into consideration the applicable laws governing cryptocurrency exchanges, as well as the standard of care expected of these entities.

Additionally, being well-prepared for witness testimony and understanding the motion to compel practice will help parties to make their case effectively.

Finally, it is important to work with experienced legal counsel to ensure compliance with all legal requirements and as such to conduct effective arbitration process.

By following these tips, parties can increase their chances of a favorable outcome in a cryptocurrency exchange dispute.

Sample Complaint

Government Sim Swap Resources:

• Sim Swap Scams: How to Protect Yourself | FBI Consumer Advice
• NYDFS Guidance on Multi-Factor Authentication For Preventing SIM-swapping
• 10 Ways to Know You May Be a Victim of Identity Theft
• Congressional Letter to FCC Concerning Sim Swap Fraud and Consumer Protection
• Homeland Security Investigations Partners with NCA to identify “Sim Swapping” attack on US celebrities
• FCC Proposes Rules to Prevent Sim Swapping and Port-Out Fraud
• Sim Swapping and Port-Out Fraud
• FBI Tech Tuesday: Sim Swapping
• SIM Swap Scams: How to Protect Yourself
• Sim Swapping Attacks
• San Antonio Pair Plead Guilty to SIM Swap Scheme
• Florida Man Sentenced To 18 Months For Theft Of Over $20 Million In SIM Swap Scheme
• California Resident Pleads Guilty for His Role in Sim Swap Scam Targeting at Least 40 People, Including New Orleans Resident

We stay up to date and track cases involving phishing attacks and sim swap affecting major cryptocurrency exchanges and mobile operators:

• IRS Financial Sues Gemini Over $37M Crypto Heist

• BTC investor sues T-Mobile over alleged SIM swap fraud | Coingeek |

One of the largest cellphone carriers in the United States is facing yet another lawsuit by a digital currency investor over SIM swap fraud. T-Mobile failed in its duty to protect its users and resulted in the plaintiff’s loss of $55,000 worth of BTC, according to the lawsuit filed in Pennsylvania.

• Can I sue T-Mobile and Coinbase.com for damages as a result of their negligence? | Avvo |

I am victim of a SIM Swap scam. Both T-Mobil and Coinbase.com where negligent and failed to protect me. I have all the evidence to prove my case.

• Crooks steal $800,000 from elderly woman’s Coinbase cryptocurrency account

An 84-year-old grandmother living in West Palm Beach started investing in cryptocurrency to help save up for her family’s future. Then, nearly all of the money she put into cryptocurrency vanished after she claims a hacker got into her accounts and drained it of about $800,000.

• Coinbase Reportedly Stealing Customer Funds, According to Complaint Documents Filed to SEC | CryptoGlobe |

Coinbase users have filed 134 pages of complaints to the SEC alleging that their funds have been “stolen” by the exchange

• T-Mobile Sued Again Over SIM Swap Crypto Losses | Law Street |

Yesterday, Kevin Frye filed a complaint in the Southern District of Florida against T-Mobile USA, Inc. for allegedly conducting a “SIM-Swap” without his consent, resulting in the loss of tens of thousands of dollars worth of cryptocurrency. The plaintiff claimed that “T-Mobile Representatives were either complicit with the theft or grossly negligent” since they have been on “notice for years that their security measures were not adequate.”

• SIM swapping victim alleges T-Mobile failed to stop $20,000 cryptocurrency scam | Cyberscoop | June 4, 2021

A Pennsylvania woman who lost the equivalent of $20,000 in cryptocurrency as part of a mobile fraud scheme says T-Mobile failed to protect her account in the face of a wave of similar incidents.

Nine months before scammers stole $20,000 from Kesler’s Coinbase account, the suit argues, Jack Dorsey was the victim of another high profile SIM swap, in which outsiders seized control of the Twitter CEO’s information. Security journalist Brian Krebs also covered the issue in 2018, specifically reporting that a T-Mobile retail store employee was under investigation for making an unauthorized SIM swa

• Man takes on Gemini and CIT in lawsuit after his $263,799.28 was allegedly stolen to purchase crypto

A man is suing Gemini, claiming it was negligent not to notice significant sums of money moved from his money market account to buy cryptocurrency on the exchange over seven days. While the trader was out of reach in the Australian outback, someone allegedly stole money from his CIT account and wired it to Gemini to purchase crypto. Later, he noticed fraudulent activity on his accounts with other banks, and is suing CIT in addition to Gemini, claiming it violated the Electronic Funds Transfer A

• Gemini Client IRA Financial Hacked for $36M in Bitcoin and Ethereum: Report

Hackers stole $21 million in Bitcoin and $15 million in Ethereum from retirement accounts held with IRA Financial Trust on February 8, according to a report from Bloomberg based on an anonymous source.

• Coinbase Customers Are Furious Over Response to Hacked Accounts and Stolen Funds | Yahoo Finance

Interviews and thousands of complaints have revealed a pattern of account hacks where users have reported money vanishing from their accounts, reports CNBC. Once criminals gain access to an account, funds can be drained within minutes.

• Lost $350,000 in a hack, now Coinbase wants me to pay them $10,000 | Reddit User | March 15, 2022 – 5 months Ago

My account that my mom and I use together got hacked in June of this year. We lost $350,000.The hacker not only transferred out all of the crypto we owned, they used the bank accounts that were linked to purchase more. When we found out about the hack, we called our banks to stop the transfer of money. We also immediately contacted Coinbase to report the hack. However, Coinbase still let the purchase go through while the bank transactions were pending. Now, Coinbass is claiming that because we stopped our banks from transferring the money, we owe them $10,000 to reimburse them for the purchase.

• Bitcoin Trading Website Coinbase Faces SEC Complaints Over Missing Crypto | Newsweek

California-headquartered crypto trading platform Coinbase—has been named in at least 115 complaints sent to the U.S. Securities and Exchange Commission and the California Department of Business Oversight

“I believe Coinbase has engaged in fraud by knowingly marketing a service it knows it cannot actually provide,” the filing from November last year read, adding: “Coinbase knows it does not have the infrastructure to timely and adequately meet customer needs.” At the time, bitcoin and other virtual currencies were rocketing in value, leading to an unprecedented interest from eager new investors.

• Hacking Coinbase: The Great Bitcoin Bank Robbery

It took only two minutes for the attacker to clean Sean Everett out of what was then a few thousand dollars’ worth of digital coins from his Coinbase wallet

• Coinbase once lost $250,000 of Bitcoin in phishing attack | Decrypt | May 22, 2020         

Author Jeff Roberts said $250,000 was stolen from Coinbase in 2013/2014. Roberts claims Coinbase’s hot wallet was hacked just a year after the company’s inception in 2012, and that the hacker made away with $250,000 worth of Bitcoin

• Parma couple loses $22,000 on Coinbase, issues warning about cryptocurrency buys

Olympia and Steve Kallman of Parma said they are dealing with some sleepless nights after police reported they had more than $22,000 taken by con artists from their Coinbase cryptocurrency virtual wallet back on Aug. 16.

• T-MOBILE SUED AFTER CLIENT LOST $8.7 MILLION IN CRYPTOCURRENCY HACK | Levin Law, August 12, 2021

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.

• T-Mobile Customer Sues T-Mobile After Losing $8.7 Million of Cryptocurrency Stolen in SIM Swap Scam | Dimond Kaplan & Rothstein, P.A.

T-Mobile has been hit with a multi-million-dollar lawsuit after Reginald Middleton lost millions of dollars when hackers gained unauthorized access to his account. The hackers used information supplied by T-Mobile to successfully circumvent the two-factor authentication measure, which allowed them to obtain a SIM card containing all of Middleton’s financial and personal information. Ultimately, $8.7 million in cryptocurrency was transferred out of Middleton’s account.

• Another Bitcoin Investor Sues T-Mobile Over SIM Swap Attack | Nasdaq | July 15, 2021

Richard Harris, the customer and plaintiff, is alleging T-Mobile’s misconduct including its failure to adequately protect customer information, hire appropriate support staff and its violation of federal and state laws led to his loss of 1.63 bitcoin.

• Coinbase Account Easily Hacked (even with 2FA) | Reddit

Last night while I was sleeping my account was logged into (web) from Russia…

• Cryptocurrency accounts wiped out ‘in an instant’ by cyber crooks

The Vidovics lost nearly $170,000 in the blink of an eye when someone hacked their Coinbase account.

• Family loses $75,000 in cryptocurrency to SIM card thieves

John said his accounts with Coinbase and Coinbase Pro were emptied as he watched his phone screen.

• Coinbase User Accounts Emptied After Hackers Gained Access to Their Crypto Wallets | Couple Discovered $168K Crypto Stolen | Tech Times | August 25, 2021

….an increasing number of users of the currently highly popular cryptocurrency exchange called Coinbase have suddenly found their accounts on the platform empty. This is after hackers have managed to gain access to them and thoroughly drain their cryptocurrency wallets.

• Sim-swappers hack League of Legends star out of $200K worth of cryptocurrency from Coinbase account | TheNextWeb | September 18, 2018

League of Legends superstar has had $200,000 in cryptocurrency stolen from them – directly from their Coinbase account

• Hackers Circle as Individual Investors Pour Cash Into Crypto

…an unauthorized user had changed Ms. Maguian’a passwords for trading platforms… Coinbase and initiated transactions that emptied her accounts of crypto valued at around $80,000 at the time

• U.S. Court Rules Money Laundering-Related Case Against Coinbase Must Have Public Trial | Cointelegraph | April 24, 2018

The Eleventh Circuit Court of Appeals ruled today that the class action against Coinbase…will be held in open court. The case in question alleges that Coinbase assisted in laundering around $8.2 mln of stolen Bitcoin (BTC) – valued at over $100 mln today.

• Coinbase Cryptocurrency accounts wiped out ‘in an instant by cyber crooks | ABC Action News |

The Vidovics lost nearly $170,000 in the blink of an eye when someone hacked their Coinbase account.

• Fraudsters are using bots to drain cryptocurrency accounts | CNBC

Dr. Anders Apgar, a Coinbase customer, said his account had a balance of more than $100,000 in crypto when it was hacked during a robocall.

• Coinbase Account Hacked $14,000 USD stolen | Reddit User |

I had $14,000+ USD in my coinbase pro account. The account was hacked at the money was switched over to crypto and sent to multiple people this occured several hours ago (05/14/2021). Case # 06082303

• Cybercriminals cleanout cryptocurrency using sim card swap scam | ABC Action News

Tampa resident David Bryant knew something was wrong last October when he found Coinbase notifications deleted from his account and his login no longer worked. “I lost about $15,000 dollars worth of crypto,” David said.

• Man’s Coinbase Account Hacked, $50K Ethereum Purchased, Class Action Lawsuit Alleges

A Texas man is suing Coinbase, the cryptocurrency trading platform. The man alleges his Coinbase account was breached to make a $50,000 unauthorized transaction. He says at least 1,000 other Coinbase accounts have also been breached.

• Nearly 75% of Stolen Ransomware Crypto Went to Russia in 2021, New Report Finds | February 15, 2022

A new report finds that Russia was linked to the majority of crypto ransomware invasions, siphoning the equivalent of $400 million in stolen funds to illicit addresses in that country. It appears Russia has strong ties to the majority of crypto hacks and cybercrimes, especially when you consider that 74% of ransomware revenue in 2021 — over $400 million worth of  cyptocurrency — went to accounts affiliated with the country in some way, according to a new report from cryptocurrency tracking and analytics firm, Chainalysis.

• Close to $12,000 STOLEN OUT OUT MY COINBASE… I WANT ANSWERS!!! Reddit User | 11 Months Ago

Case #05530638, #05542432. This all happened 4/15/21-4/16/21. How can I talk with someone from coinbase? I am so frustrated that someone stole my Bitcoin, ETH, and transferred $500 from my bank account and stole that too from my coinbase… Total almost $12,000. I am trying to understand what is going on and now I am completely blocked out of coinbase. I want answers!

• Coinbase Customers Up in Arms After Hackers Drain Crypto Wallets | Techradar.Pro |

An increasing number of users of the highly popular cryptocurrency exchange Coinbase have found their accounts on the platform empty after hackers managed to gain access to them and drain their cryptocurrency wallets.

• Katy man out of about $17K after his cryptocurrency account was hacked

Raza says Coinbase, the cryptocurrency exchange where he was robbed, has not been able to provide a solution and he thinks they need to step up security protocols.

• Coinbase customers with hacked accounts get no justice from ‘horrible’ US laws: Fintech lawyer

 In four minutes, cyber looters pilfered $34,123 worth of virtual currency from a Virginia resident’s Coinbase (COIN) account, the 38-year-old told Yahoo Finance.

• Coinbase hacked in the middle of the night $60k stolen. What should I do? Reddit | January, 2021

I received several txts last night sending me a 2fa code. I woke up and my bitcoin was transferred at 230am to some address. Any idea what happened? Was it my cell phone provider? Seems fishy to me since I could not detect any threats my phone. No idea how the culprit read my txt messages but oh well.

• All of My Crypto Was Stolen! On Coinbase | Reddit User | 8 Months Ago

I am an active user of CoinBase and somehow my account was breached even with 2FA enabled. The hackers stole all of the coins in my account by converting them to BTC and sending them to their wallet. They then deposited $1k USD and purchased BTC using my debit card and stole it before I could lock my account down.

• CoinBase Account Hacked – $23k Stolen and NO HELP from CoinBase | Reddit User | March 15 – 7 months

Taking my case to reddit. My account was hacked approximately 3 weeks ago and .50 BTC (approximately $23k USD) was stolen from my account. In summary, I decided to log into my account one day to check in on the balance. A hacker had locked my account out.

• Hackers drain cryptocurrency accounts of thousands of Coinbase users | PC Gamer

…hackers managed to get into the accounts and move funds off the platform, draining some accounts dry. Thousands of customers had already begun to complain to Coinbase that funds had vanished from their accounts…Coinbase did not disclose how much cryptocurrency was stolen in the attack.

• Coinbase slammed for what users say is terrible customer service after hackers drain their accounts | CNBC | August 24, 2021

CNBC interviewed Coinbase users across the country. The interviews and complaints revealed a pattern of account takeovers, where users see money suddenly vanish from their account, followed by poor customer service from the company. Since 2016, Coinbase users have filed more than 11,000 complaints against Coinbase with the Federal Trade Commission and Consumer Financial Protection Bureau, mostly related to customer service.

• Coinbase customers up in arms after hackers drain crypto wallets | August 26, 2021

An increasing number of users of the highly popular cryptocurrency exchange Coinbase have found their accounts on the platform empty after hackers managed to gain access to them and drain their cryptocurrency wallets.

• Hackers continue to steal entire accounts out of Coinbase. Many people had all their crypto stolen, but no answers from law enforcement or Coinbase on how to stop it.  | Reddit User

Loads of scams out there. Remember Coinbase does not support chat. You will never speak with a Coinbase employee.

• LOST $30K WORTH OF CRYPTO ON THURSDAY FROM COINBASE AND I CANT EVEN GET A REPLY TO TRY AND SAVE MY REMAINING $100K. GET YOUR MONEY OUT ASAP I AM ABOUT TO LOSE IT ALL

I have been trying to contact Coinbase support since Thursday when I saw $25k BTC sold from my wallet without my consent and could not receive any assistance at all from Coinbase to protect my investment.

• A string of thefts hit Bitcoin’s most reputable wallet service | The Verge | February 7, 2014

It was 10.6 bitcoins held in the wallet service Coinbase, the most well-funded and widely implemented service on the market.

• Coinbase is mistakenly draining customers’ bank accounts, and people are freaked | Mashable | February 15, 2018

All your money is gone. Whoops! Sorry for your loss. Some Coinbase account holders are losing their shit today as they look to their bank statements to find that the exchange has withdrawn excessive amounts of money from their accounts.

• Bitcoin Trading Website Coinbase Faces SEC Complaints Over Missing Crypto | Newsweek

California-headquartered crypto trading platform Coinbase—has been named in at least 115 complaints sent to the U.S. Securities and Exchange Commission and the California Department of Business Oversight

“I believe Coinbase has engaged in fraud by knowingly marketing a service it knows it cannot actually provide,” the filing from November last year read, adding: “Coinbase knows it does not have the infrastructure to timely and adequately meet customer needs.” At the time, bitcoin and other virtual currencies were rocketing in value, leading to an unprecedented interest from eager new investors

• T-Mobile Sued Again Over SIM Swap Crypto Losses | Law Street |

Yesterday, Kevin Frye filed a complaint in the Southern District of Florida against T-Mobile USA, Inc. for allegedly conducting a “SIM-Swap” without his consent, resulting in the loss of tens of thousands of dollars worth of cryptocurrency. The plaintiff claimed that “T-Mobile Representatives were either complicit with the theft or grossly negligent” since they have been on “notice for years that their security measures were not adequate.”

• SIM swapping victim alleges T-Mobile failed to stop $20,000 cryptocurrency scam | Cyberscoop | June 4, 2021

A Pennsylvania woman who lost the equivalent of $20,000 in cryptocurrency as part of a mobile fraud scheme says T-Mobile failed to protect her account in the face of a wave of similar incidents.

Nine months before scammers stole $20,000 from Kesler’s Coinbase account, the suit argues, Jack Dorsey was the victim of another high profile SIM swap, in which outsiders seized control of the Twitter CEO’s information. Security journalist Brian Krebs also covered the issue in 2018, specifically reporting that a T-Mobile retail store employee was under investigation for making an unauthorized SIM swap.

• Hackers Circle as Individual Investors Pour Cash Into Crypto | The Wall Street Journal | November 21, 2021

Mr. Harris sued T-Mobile in July, alleging the company’s practices didn’t meet federal standards and allowed a hacker to take over his phone number in 2020 and steal bitcoin worth nearly $15,000 at the time, and more now.

T-Mobile declined to comment on the suit but motioned to move the case to arbitration. Like Verizon and AT&T, the company requires arbitration to resolve disputes in its terms of service, often leading to closed-door settlements.

• Massive data breach at T-Mobile lands giant class action in KC federal court | Kansas City Business Journal | January 5, 2022

Hackers stole the personal identification data for millions of past, present and prospective T-Mobile customers, leading to a huge class-action lawsuit.

• Hacker lifts $1 million in cryptocurrency using San Francisco man’s phone number, prosecutors say | CNBC | November 21, 2018

Losing cellphone service is inconvenient. But in some cases, it also might mean you’re getting hacked.

“It’s a whole new wave of crime,” said Erin West, the deputy district attorney of Santa Clara County. “It’s a new way of stealing of money: They target people that they believe to have cryptocurrency,” she told CNBC.

• T-Mobile data breach and SIM-swap scam: How to protect your identity | Cnet | August 22, 2021

Just when you think the massive T-Mobile hack can’t get any worse, on Friday the carrier announced that over 50 million people, including current and former customers as well as prepaid customers, were affected by the breach. Information like Social Security numbers, driver’s licenses and account PINs were exposed.

• Another Bitcoin Investor Sues T-Mobile Over SIM Swap Attack | Coindesk | July 15, 2021

Cellphone carrier T-Mobile is being sued over allegations it failed to safeguard against a SIM swap scam that cost one customer $55,000 in lost.

• T-Mobile Sued Over $8.7M Stolen in SIM-Swap Attacks | Cointelegraph | July 23, 2020

The CEO of a crypto firm that recently settled with the SEC over its 2017 ICO is suing T-Mobile over a series of SIM-swaps that resulted in the loss of $8.7 million worth of crypto.

The suit accuses T-Mobile of having “abjectly failed” in its responsibility to protect the personal and financial information of its customers.

• Crypto Theft Victim Sues T-Mobile for Allowing SIM-Swap Attack | Finance Magnates | February 12, 2021

A victim of a crypto theft using SIM-swap attack has filed a lawsuit against T-Mobile, alleging the failure and negligence on the part of the US cell phone carrier in preventing these scams.

“This action arises out of T-Mobile’s systemic and repeated failures to protect and safeguard its customers’ highly sensitive personal and financial information against common, widely reported, and foreseeable attempts to illegally obtain such information,” the lawsuit alleged.

• T-Mobile being sued by victim of SIM swapping attack | Tmo News | February 11, 2021

T-Mobile is currently facing a complaint against one of the victims of SIM swapping, a type of fraud.

Cheng believed that the attack would not have happened if not for “T-Mobile‘s negligent practices and its repeated failure to adhere to federal and state law.”

• T-Mobile Is Facing Another SIM Swapping Complaint | Android Headlines |

T-Mobile is facing yet another SIM swapping complaint involving cryptocurrency theft. Last week, a Philadelphia man named Richard Harris filed a complaint in the Eastern District of Pennsylvania against the wireless giant alleging he lost approximately $55,000 worth of Bitcoin due to the company’s failure to safeguard his account

• Sim Swap Fraud, Suspicious of T-Mobile Stores & Employees | Reddit |

The sim was successfully swapped which means that either it was done without the pin or the person knew the pin. Again, this is only possible if it was a T-Mobile employee and most likely one of the employees that help a month prior during the line add and upgrade.

• WORST COMPANY ! LEAVE T-MOBILE TODAY! LOST THOUSAND OF DOLLARS BECUASE OF SIM SWAP! | Reddit |

When it comes to security or whatever it is leave T-Mobile. It is insider job someone is doing sim swaps.

• Why you can’t ignore the hackers and data breaches, like one at T-Mobile | Detroit Free Press |

T-Mobile confirmed this week that it was hit by a “highly sophisticated cyberattack” that exposed names, dates of birth, Social Security numbers and driver’s license information for more than 40 million consumers who had applied for credit with T-Mobile.

• Here’s how I survived a SIM swap attack after T-Mobile failed me – twice | ZDNet |

After a crazy week where T-Mobile handed over my phone number to a hacker twice, I now have my T-Mobile, Google, and Twitter accounts back under my control. However, the weak link in this situation remains and I’m wary of what could happen in the future.

• T-Mobile discloses data breach after SIM swapping attacks | Bleeping Computer |

American telecommunications provider T-Mobile has disclosed a data breach after an unknown number of customers were apparently affected by SIM swap attacks. SIM swap fraud (or SIM hijacking) allows scammers to take control of targets’ phone numbers after porting them using social engineering or after bribing mobile operator employees to a SIM controlled by the fraudsters.

• Fraudulent Sale of My SIM card | T-Community | 2019

Yesterday, someone went into a T-Mobile retail store used a fake California Drivers License to buy a copy of my SIM card.

• Here is how Coinbase and T-Mobile allowed a common thief to steal my bitcoin | LinkedIn |

And now for the crazy chain of events, where T-mobile allowed a complete stranger to do a SIM swap on me, and Coinbase allowed a complete stranger to change my Coinbase identity with no questions asked.

• SIM Swapping Victims File Lawsuits Against AT&T and T-Mobile for Cryptocurrency Thefts | WCC Tech |

Silver Miller said that “with little more than a persuasive plea for assistance, a willing telecommunications carrier representative, and an electronic impersonation of the victim,” criminals can manage to steal millions of dollars targeting unsuspecting victims.

• What happens when hackers steal your SIM? You learn to keep your crypto offline | TechCrunch |

Hackers swapped my T-Mobile SIM card without my approval and methodically shut down access to most of my accounts and began reaching out to my Facebook friends asking to borrow crypto.

• The Coinbase Crypto Heist: What We Know

Coinbase has admitted that hackers stole crypto from thousands of its users’ accounts over a three-month period.

• Coinbase hackers exploit multi-factor flaw to steal from 6,000 customers

Bad actors were able to infiltrate the accounts of and steal cryptocurrency from around 6,000 Coinbase customers by exploiting a multi-factor authentication flaw.

• Man out $75,000 after cryptocurrency stolen from Coinbase | News Miami

Matthew doesn’t know how the hackers were able to access his Coinbase account, but he remembered that when he signed up with Coinbase, they advertised they had insurance.