A teenager in New York is being sued for more than $70 million in a federal court due to his alleged role as the potential ringleader of a cryptocurrency fraud scheme that may have stolen millions in crypto funds from investors around the country. The teen’s name is Ellis Pinsky, and the plaintiff is none other than Michael Terpin, who crypto enthusiasts should all know by now.
Terpin Is At It Again
Terpin has been heavily involved in a potential SIM-swapping case since 2018 that saw him lose millions in cryptocurrency funds. SIM-swapping is a popular and dangerous method of theft in which hackers obtain control of a person’s cell phone SIM card. This usually happens in one of two ways. They either bribe a customer service representative working with the person’s cell phone provider to give up a victim’s private information.
The SIM card of the person’s phone is then switched over to the hacker’s control for a small bribe.
The second way involves gaining access to secure data surrounding the victim – such as their birthdate and/ or social security number – and calling in to say that this person needs a new phone or SIM card. The hacker is usually able to answer all the security questions and give all the information that’s needed to the customer service rep as they’ve spent the necessary time obtaining the victim’s data, and thus the switch happens without problem or delay.
Terpin is suing Ellis Pinsky for exactly $71.4 million. He claims that Pinsky is the mastermind of a crypto fraud organization that may have stolen as much as $23.8 million from Terpin about two years ago. At the time, Pinsky would have been on the verge of turning 16. Terpin issued a statement explaining:
On the surface, Pinsky is an ‘all American boy.’ The tables are now turned.
Court documents issued by Terpin suggest that Pinsky would often brag about his SIM-swapping operation. He would discuss the details with his friends, and joke that he would “never get caught.”
Crypto theft is clearly a huge problem and has reached record numbers over the past two years. As much as $4.5 billion in digital funds were stolen from unsuspecting victims in 2019 according to data released by CipherTrace.
An Issue That Gets Bigger and Bigger
At the time of writing, it is unclear if Pinsky has managed to obtain a lawyer. In May of last year, Terpin won a civil case in California against Nicholas Truglia, the man allegedly responsible for the $23 million theft he endured. Truglia is now accused of being a potential Pinsky associate.
Terpin also filed suit against AT&T, his service carrier at the time, for not taking stronger measures to keep his identity, data, and funds more secure. That case remains open at press time.