A Brazilian took the operator Claro in court, after losing approximately R$ 200 thousand in bitcoin and claiming that the cause is that his chip was cloned. All custody of the amount was with exchange Binance, which was not subpoenaed for comment in the lawsuit. The case is yet another one that reinforces some basic concepts of bitcoin investments, in which it is essential not to leave values stagnant in exchanges, as they are points of failure in the design of the technology. Furthermore, it shows that two-factor authentication with SMS is a dangerous practice to set up on exchanges. The case is followed by the Federal District Court of Justice (TJDF).
Brazilian loses bitcoin and accuses Claro that his chip was cloned
A father and son shared a plan with Claro operator in the Federal District, when the son (dependent) stopped receiving calls. As he uses the number for work, he ran to the carrier’s support in December 2021 to complain about the lack of access to his line. Until then, he didn’t realize that his problems were just beginning. After more than ten days, he managed to do a number portability in Claro’s physical store and his mobile internet still took about 10 days to stabilize. However, on December 20th, after 13 days since his line loss, he noticed that his bitcoins deposited on Binance were gone. He noticed that someone with a mobile device in Franca, in the interior of São Paulo, had cloned his chip and withdrawn all his funds from the platform. “It explains that on 12.20.2021 the second author discovered that his account on the Binance brokerage was accessed since 12.7.2021 by a device located in Franca, São Paulo. It narrates that on 12.11.2021, 0.73229838 bitcoins were subtracted from its account, the amount of bitcoins corresponding to $34,640.64 (thirty-four thousand six hundred and forty dollars and sixty-four cents). He reports that it was only then that the second author discovered that his chip had been cloned, enabled on another device and used to steal his bitcoins. He explains that criminals were able to gain access to the broker’s password through SMS password recovery.” As he had two-factor authentication at the brokerage with SMS, the hacker was able to withdraw the entire amount, valued at R$ 193 thousand at the time. As a result, he sued Claro in the TJDF, claiming that there was a failure to provide the service that caused great damage to the bitcoin investor. He asked the company to pay R$10,000 in moral damages. Despite the amount being deposited on Binance, the broker’s client did not file a lawsuit against the platform, only the telephone operator.
Of course tried to reverse decision, it didn’t work
Claro sought to defend itself, claiming that it is not to blame for fraud on Binance. In addition, the operator declared that it had no relationship with the cryptocurrency exchange, asking to be excluded from the process. The TJDF judge then did not agree with Claro’s statements and asked him to prove that he was not responsible for the failure to provide the service. The operator’s defense filed a motion for clarification, but again had its request denied.
“In fact, what the appellant intends is to change the decision, having to handle the appropriate appeal, since the re-discussion of the matter through the narrow path of clarification embargoes is not allowed. In view of the foregoing, I reject the motion for clarification.”
Thus, the operator must prove that it did not facilitate the commission of fraud, or file a new appeal in the second instance. The case is not yet finalized and is still being analyzed by the justice, which expects Claro to prove that there was no fraud.