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Security AT&T Bitcoin Cellphones

Man Sues Teenager's 'Crew of Evil Computer Geniuses' Over Crypto Heist (bloomberg.com) 66

Posted by EditorDavid from the Archie-and-Jughead dept.
Cryptocurrency investor Michael Terpin sued AT&T over a SIM card attack in 2018 that lost him control over $23 million.

Now Bloomberg reports that he's suing the "15-year-old hacker and his crew of 'evil computer geniuses'" behind the attack. (Alternate source) Terpin, the founder and chief executive officer of blockchain advisory firm Transform Group, is suing Ellis Pinsky, now 18, for $71 million under a federal racketeering law that allows for triple damages. "Pinsky and his other cohorts are in fact evil computer geniuses with sociopathic traits who heartlessly ruin their innocent victims' lives and gleefully boast of their multi-million-dollar heists," Terpin said in his complaint filed Thursday in federal court in Manhattan.

Pinsky, of Irvington, New York, couldn't be reached for comment....

According to Terpin. Pinsky's ring identifies people with large cryptocurrency holdings and gains control of their phones by bribing or fooling employees of their wireless carriers. The hackers are then able to intercept authentication messages, gain information and drain the victims' cryptocurrency accounts.

Pinsky has boasted to friends that, starting at age 13, he stole more than $100 million worth of cryptocurrency, hundreds of thousands of dollars of which has been converted into cash stored in his bedroom, the lawsuit alleges. Terpin also claims that, after confronting Pinsky about his alleged role in the theft, the teenager sent him cryptocurrency, cash and a watch with a combined value of $2 million. He claims this was an admission by Pinsky that he had stolen from Terpin.
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Man Sues Teenager's 'Crew of Evil Computer Geniuses' Over Crypto Heist More

Man Sues Teenager's 'Crew of Evil Computer Geniuses' Over Crypto Heist

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  • Good (Score:2, Insightful)

    by Pentium100 ( 1240090 )

    Stealing bitcoins is the same as stealing cash - you do not just make a copy, the original owner is actually deprived of the coins which hold actual value.

    • There are questions here. Did this teen actually steal the bitcoin from this guy? Did this guy ever actually have the bitcoin to begin with? If he had it, did he really lose it, or is this a big money-laundering scam?

  • His mother doesn't find the hundreds of kilos of cash in his bedroom.

  • I doubt that financial restitution is going to make a difference here.

    • Re: (Score:3, Insightful)

      by gavron ( 1300111 )

      It's been ages. No prosecutor is touching this. That suggests either that there's insufficient evidence, a jurisdictional issue, or some other fundamental flaw that prevents even handing this to a grand jury -- which indicts ham sandwiches. https://www.quora.com/What-doe... [quora.com]

      A civil suit has lower burdens of proof but given the nature of cryptocurrency that becomes a higher bar to meet.

      As others have said in this thread... it's not a matter of how your cryptocurrency will be stolen, but when.

      As I've said, i

      • It all depends on the young man's lawyer. If he has the best lawyer money can by, he's guilty. If he has to borrow money off his parents to hire some shitty lawyer, he's innocent.
  • if he has grounds to sue why don't the policy charge these kids with a crime? Article's behind a paywall and I can't be bothered with outline.com right now (subby couldn't either) but something's not right here. He's not going to get anything from a bunch of kids anyway.
    • Civil and criminal are different things...
      • from suing a bunch of kids. He won't get any money, and it'll cost a bunch of money. If he's just a loon I guess there's that, and the judge will throw the case out (and he either won't have a lawyer or will represent himself and again, the judge will toss it).
        • The kid already gave two million away as hush money, suggesting he has more. How are you inferring there's nothing to be gained? And how stupid are you to think the police are the least bit interested in digital theft? Police are enforcement, the DA or FBI would be handling this. And good luck finding a governmental agency with the resources to understand/prove/prosecute anything related to bitcoin. All the blockchain people are in the private sector.

        • Standards of proof are different in criminal court. He might not be able to prove that anything was stolen in criminal court, but he might be able to show monetary damages in civil court. Then he can have the court assign a penalty. How the kids chooses to resolve the penalty is up to him.

  • Comment removed based on user account deletion

  • "Investor" (Score:5, Insightful)

    by gavron ( 1300111 ) on Saturday May 09, 2020 @07:05PM (#60042206)

    > Cryptocurrency investor...

    There's no such thing. He's a gambler, and he gambled poorly on AT&T's 2FA and now he's trying to do a CIVIL SUIT against someone that should have CRIMINAL CHARGES filed against him. My "gamble" is that as he was unable to convince a prosecutor there's evidence to convict, he won't do well in civil court either.

    Investments:
    Stocks are an investment. They represent a security backed by a corporation that typically has assets, revenues, and --hopefully-- profits.
    Bonds are an investment. They represent a security backed by government guarantees -- except of course when stupid idiots claim we can just not pay China.
    Money market accounts, hedge funds, hard-money loans, title/payroll loans, lockbox receivables, and many other instruments of investment similarly are "backed" by actual value or demarcated revenue.

    Cryptocurrency is worth exactly zero. The fact that someone will pay you for it more tomorrow than you paid for it today isn't an investment. It's a gamble.

    He didn't "lose $23M" because he didn't "invest" $23M. On information and belief he had some BC removed from his account that HAD HE GONE TO SELL IT may have been valued that high at the time. I'm sure this will help his capital gains tax carryover for the next 23 years.

    E

    • You won't find a prosecutor in all of America capable of understanding the case well enough to devote resources to it. Civil suit is literally the only viable avenue, and the fact that the kid offered hush money suggests not only that there is more money to be had, but also that the courts will be able to grasp that the kid is guilty based on this action.

      • Re: (Score:1)

        by gavron ( 1300111 )

        >...the kid is guilty based on this action.

        Respectfully, I disagree. The presumption of innocence is strong, and a "desire to settle a matter" is not indicative of guilt. There are lots of people (and companies) every day willing to pay 10 on the dollar to have the issue go away. While we can take the plaintiff's word at face value -- and why would we -- the fact that someone gave him "back" 10% of his $23M doesn't prove guilt.

        You can even be a 16 year old boasting about taking $100M, but 16 year olds

        • I appreciate your points, but there is a big difference between a criminal and civil trial. There is no assumption of innocence in a civil trial, just whichever side seems more "right" wins. Paying someone off suggests guilt, so he's gonna need a lot of evidence to make that go away.
      • They don't need to understand it in any special way, just that something of great value was unlawfully taken. Cryptocurrency is recognized as a financial instrument and regulated by the SEC. There are laws dealing with cybercrime. Prosecutors don't need to understand how cryptocurrency works, just that $23 million of something was stolen. If they can prosecute someone for hacking bank accounts, they can do this too.

    • But here's the difference. He didn't lose $23M because the value of bitcoin tanked. He lost it because the coins were stolen from him. This is no different than someone hacking your investment account and stealing the bonds/etc. Or just stealing valuable items (or cash) from your house.

      Let's consider this:
      Example A: I buy $23M worth of tulips hoping to sell them for much more. However, the value tanks and I can only sell the tulips for $1 total. Well, I gambled and lost. Whatever.
      Example B: I buy $23M worth

    • Comment removed based on user account deletion
    • I have no dog in this race, but there are so many things wrong in your post.

      Any value that an item has is 100% attributable to what the market values it to be...with no necessary correlation to anything rational. From Gold to a Honus Wagner baseball card.

      Crypto is worth exactly what the market will pay for it. Not zero. That is a completely false statement. Anyone who wouldn't buy 1BTC for $100 today would be a fool. You could flip it today for $9000 profit. I'm not advocating BTC, I'm just stating fact

      • Re: (Score:1)

        by gavron ( 1300111 )

        I understand what you're saying. If I'm willing to buy for X and you're willing to sell for X the value is X. That confuses value with price.
        I'm going to try and clarify one last time.

        Say you give me $9,000 and I give you a phone number that calls into my call center. It works 24x7 but if the call volume is high it may take some time on hold to get through.

        When you get through you can sell the right to call the call center, so that you can't call again, and you'll be paid whatever is the current price pe

    • You can file a civil suit against someone facing criminal charges. Sometimes civil action is necessary to recover losses from crime.

      Your reasoning regarding the value of cryptocurrency is flawed. Cryptocurrency has a market value. It can be exchanged for goods, services, and hard currency. That its value is slightly more imaginary than anything else's, or that like any other investment it involves risk, is irrelevant.

  • the kid can just declare bankruptcy. And the guy filing it gets nada (other then a huge legal bill).

    • "Declaring bankruptcy" (Score:2, Informative)

      by gavron ( 1300111 )

      The bankruptcy process was designed to alleviate debt beyond reason and the debtors' prison. To that end a bankruptcy court (in the US these are special Federal Courts who only deal with bankruptcy) and its judge evaluate the merits of a case. Typically for a case to proceed the petitioner needs to show debts far in excess of assets. If this 18 year old kid has spent 5 years building up a treasure trove of $100M and lives in Mom's house, it's unlikely he has debts in excess of his assets. A judge would

    • Kid gave away 2 million dollars and you think he doesn't have more? No judge will believe there aren't piles of cash buried in the back yard. Did you get your understanding of bankruptcy from watching The Office? I thought slashdot used to be full of smart people, but your low ID number makes me think I'm just remembering the past fondly.

    • If the kid wants to stiff creditors like that after filing for bankruptcy, he'll have to scotch his crypto entirely - or lock it up and never liquidate it. As soon as he's in cash, the court can force him to pay.

    • I am a lawyer, and primarily practice bankruptcy law.

      This just won't work: embezzlement and fraud are both exceptions to discharge, so the debt would still be owed.

      hawk

  • How? (Score:4, Funny)

    by t4eXanadu ( 143668 ) on Saturday May 09, 2020 @07:46PM (#60042338)

    How do you identify who has large sums of cryptocurrency holdings? Asking for a sociopathic teenage friend.

  • wah wah SMS (Score:4, Interesting)

    by nullchar ( 446050 ) on Saturday May 09, 2020 @11:25PM (#60042760)

    Lesson: don't use SMS as multi factor authentication. You shouldn't have 1k tied to your silly phone tracker, let alone millions of dollars.

    • He shouldn't have had anything in his exchange account long enough for anyone to compromise his account and loot it. If he had it in a proper offline wallet, he'd be fine. 2FA won't expose one of those.

  • I think I saw this movie a long time ago. https://www.youtube.com/watch?... [youtube.com]
  • So the kid was boasting that he stole $100 million. And the guy claims he lost $23 million. If all that is true then the kid stole somewhere between $77 million and $100 million that didn't belong to the guy.

    The guy became aggressive and convinced the stupid kid to give him $2 million to go away. This is evidence that the guy was very aggressive, that the kid was afraid of him, and the kid decided it was better to give him two million. It's no evidence that the kid stole _from him_.

  • "Crew of Evil Computer Geniuses' Over Crypto Heist"

    Sounds like this teen has a huge lair built inside of a volcano, and he sends squads of ninja-clad mercinaries for his evil side missions. Better be careful.

  • was that the value at peak or after the crash value?

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