TL;DR
- Crypto investors who lost funds in the Atomic Wallet hack filed a class-action lawsuit. Based on their claims, the company knew about security vulnerabilities.
- In June 2023, hackers managed to access over 5,500 crypto wallets. Estimates show that users lost approximately $100 million.
Class-action lawsuit filed in the United States
Atomic Wallet, a prominent cryptocurrency platform, is once again under scrutiny. A group of disgruntled investors has initiated a class-action lawsuit, expressing discontent with the company’s operational management.
A hack resulted in around $100 million in losses two months ago. Many customers believe Atomic Wallet was aware of these security vulnerabilities but proceeded with business as usual.
The lawsuit, targeting Atomic Wallet and its CEO, Konstantin Gladych, is set to unfold in the US District Court of Colorado.
Max McKenzie, a German attorney, and Boris Feldman, co-founder of Moscow’s Destra Legal, orchestrating the legal proceedings. Together, they advocate for about 50 clients who collectively suffered a $12 million loss due to the hack.
The reason behind the lawsuit: The Atomic Wallet hack
Atomic Wallet suffered a major exploit in mid-June 2023. Numerous media publications, including Reuters, reported on the event where attackers affected at least 5,500 crypto accounts.
Early reports from the cryptocurrency analytics firm Elliptic pointed to a North Korean hacker group known as “Lazarus” as the culprit behind the heist. While Lazarus has a history of similar accusations, Pyongyang has consistently refuted such claims.
Even the Estonian police investigated the cryptocurrency theft. According to a spokesperson from the country’s National Criminal Policy, there was no conclusion.
Boris Feldman, one of the lawyers involved in the lawsuit, has a contrary opinion. He believes a Ukrainian group is behind the crypto theft.
Destra Legal and Match Systems, a blockchain analytics firm, have worked on a proprietary investigation.
Feldman reports evidence of Ukrainian hacker activity. Considering the geopolitical context, this is plausible. Ukraine conflicts with Russia, and prominent Russian investors have significant holdings in Atomic Wallet.
The brand claims the app affected less than 0.1% of its users. This suggests that the operation might have targeted specific individuals.
Unanswered Questions and the Wider Implications for Crypto Safety
More than two months post-hack, Atomic Wallet has yet to clarify the cause of the exploit. They’ve alluded to possibilities ranging from user device viruses and infrastructure breaches to man-in-the-middle attacks or malware code injections.
Incidents like these highlight the persistent concerns about crypto platforms’ ability to safeguard customer assets. As digital asset storage continues to challenge companies, they remain lucrative targets for hackers.
Considering the scale of the Atomic Wallet breach, it’s doubtful that investors will fully recover their losses. Notably, crypto scams accounted for over $14 billion in 2021, leaving many to face significant financial setbacks.
Julia Zakharchuk
Julia is a professional crypto and blockchain writer known for her insightful YouTube channel "MoneyFest." She showcases her dynamic presentation skills as a host and moderator at blockchain conferences. Julia drives also business development at ChainUp and advises UNITBOX, an innovative NFT renting protocol. With her exceptional expertise, Julia is a highly valued industry contributor and is set to make a lasting impact. We at Coinweb are lucky to have her on board.
