Atomic Wallet Sued for Negligence Following $100M Crypto Loss Incident

A group of cryptocurrency investors have taken legal action against Atomic Wallet after a security breach that resulted in $100 million in losses this past June.

The incident has led to a class action lawsuit, with numerous high-net-worth investors from Russia and the Commonwealth of Independent States joining forces to seek compensation.

According to a report by IntelliNews on August 21, the disgruntled investors, under the coordination of German lawyer Max Gutbrod and Boris Feldman, co-founder of Moscow legaltech firm Destra Legal, are pursuing their claims against the cryptocurrency wallet provider.

The investors, numbering around 50, had collectively lost approximately $12 million due to the breach.

Gutbrod, who had a long-standing partnership with Baker & McKenzie in Moscow, emphasized that the legal team’s main goal is to recover the lost assets for their clients.

He expressed dissatisfaction with Atomic Wallet’s response to the breach, alleging that the company failed to provide information about the hack to its clients and did not report the incident to law enforcement.

The security breach, which occurred in mid-June 2023, affected over 5,500 cryptocurrency accounts on Atomic Wallet.

Although initial reports pointed to the Lazarus Group, a North Korean cybercrime organization, as the perpetrator, new claims have suggested the involvement of another group.

Boris Feldman from Destra Legal indicated that evidence points towards a Ukrainian hacker group orchestrating the attack, citing findings from their collaboration with blockchain analytics firm Match Systems.

Atomic Wallet, a noncustodial cryptocurrency wallet, has not yet provided a comprehensive explanation for the breach, listing several potential causes, including a virus on user devices, an infrastructure breach, a man-in-the-middle attack, or malware code injection.

The company has consistently maintained that less than 0.1% of its app users were impacted by the breach. Despite the hack, the wallet continued its operations without significant interruption.