The law firm Silver Miller has filed three arbitration claims against AT&T and T-Mobile for not adequately protecting cryptocurrency owners’ financial information.

The Coral Gables, Fla. firm, which focuses on cryptocurrency issues, said the telecommunications giants left holes in their security protocols and failed “to properly train and monitor their employees.” These oversights enabled thieves to remotely control SIM cards in customers’ smartphones and access financial records and account information. In some instances, they were able to empty victims’ accounts and steal other assets, the firm alleges.

Observers of this type of identity theft call the practice SIM swapping or hijacking.

More Filings to Come

David Silver, a founding partner at Silver Miller, told ThirtyK he “anticipated more filings in the near future.” But he added that he was hoping cellphone companies would “enhance their security and stop this problem,” and that the problem “should be easy to fix.”

At the time of publication, AT&T and T-Mobile had not responded to emailed requests for comment.

One AT&T account holder lost more than $621,000 in a SIM swap. Silver Miller said in a press release that prior to the theft, the company had assured the holder it had increased security on the account after an earlier attempted hack. Two T-Mobile victims lost $400,000 and $250,000, respectively, in similar incidents, according to the law firm.

Alleged Security
“Some of the people who have been hacked applied for and received from the phone companies enhanced security measures (or so the companies told them),” Silver said in a written comment sent to ThirtyK.

SIM cards (subscriber identity modules) store user data in cellular phones via global mobile (GSM) networks.

Silver said after last year’s runup in cryptocurrency prices, SIM swapping grew more frequent. He said the three alleged victims approached his firm for representation.

“It became more prevalent after the rise in value of cryptocurrencies,” Silver said.

James Rubin
James Rubin has covered a range of business topics for such publications as the Economist Intelligence Unit, Forbes Insights and Adweek. His papers have been presented at World Economic Forum events. He was an associate editor at TheStreet and is the author of the "Urban Cyclist's Survival Guide."