A lawsuit is underway against Atomic Wallet, a crypto wallet that recently experienced a severe breach resulting in $100 million in losses. The lawsuit alleges that Atomic Wallet failed to communicate the hack to its clients. Also, it alleges that it neglected to report the incident to the authorities.
Disgruntled Investors, Legal Coordinators and Representatives
A group of cryptocurrency investors have united to file a class action against Atomic Wallet. These investors are primarily from Russia and the Commonwealth of Independent States.
The breach occurred in June and led to substantial financial losses, as reported by BNE IntelliNews on August 21.
The lawsuit is being led by Max Gutbrod, a German lawyer, and Boris Feldman, co-founder of Moscow legaltech firm Destra Legal. Gutbrod, formerly associated with Baker & McKenzie, is representing around 50 clients who collectively lost $12 million due to Atomic Wallet’s breach.
He stated,
“We are diligently working on recovering our clients’ assets and preparing a class action against Atomic Wallet. They neither informed our clients about the hack nor reported it to the police.”
The Breach, Implications and New Suspicions
In mid-June 2023, Atomic Wallet, a noncustodial cryptocurrency wallet, fell victim to a massive exploit. This resulted in losses of $100 million. Furthermore, this breach targeted approximately 5,500 crypto accounts on the platform.
The hack was later attributed to the North Korean cybercriminal Lazarus Group by crypto analytics firms like Elliptic. This group has a history of pilfering billions in crypto through a variety of thefts.
Although initial suspicions pointed to Lazarus Group’s involvement, recent claims suggest an alternate perpetrator. Boris Feldman alleges that a Ukrainian hacking group could be responsible for orchestrating the hack. Destra, has been conducting its own investigation on behalf of the affected investors. This is in collaboration with blockchain analytics firm Match Systems, Feldman’s firm.
“Traces of Ukrainian hacker group involvement have been identified,” Feldman reported.
Details Surrounding the Breach
Atomic Wallet has not fully disclosed the exact circumstances that led to the exploit in June. The firm offered four “probable” causes. They include user device viruses, infrastructure breaches, man-in-the-middle attacks, or malware code injections. Despite the breach, Atomic Wallet continued to emphasize that less than 0.1% of its app users were impacted.
Remarkably, Atomic Wallet continued its operations without significant disruption shortly after the hack occurred.
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