Cryptocurrency Investors File Class Action Against Atomic Wallet After $100M Breach

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In June 2023, Atomic Wallet, a prominent noncustodial cryptocurrency platform, faced a staggering loss of $100 million due to a significant security breach. Following this, a collective of affected investors, predominantly from Russia and the Commonwealth of Independent States, initiated legal actions against the company. With mounting allegations and investigations, Atomic Wallet’s reputation is now under scrutiny.

High-Net-Worth Investors Join the Fight

Reports from BNE IntelliNews indicated that numerous high-profile investors from Russia and its neighboring states actively participate in the class action against Atomic Wallet.

German attorney Max Gutbrod, with his two-decade-long association with Baker & McKenzie in Moscow, has teamed up with Boris Feldman, a co-founder of Moscow’s Destra Legal, to lead the charge. Gutbrod recently asserted that their legal representation encompasses approximately 50 clients who have incurred losses of $12 million due to the breach.

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Expressing his concerns, Gutbrod remarked, “Our paramount objective is the asset recovery for our clientele. Alarmingly, Atomic Wallet refrained from apprising our clients about the breach or approaching the authorities.”

Diving Deeper: Insights into the Atomic Wallet Breach

The mid-June exploit impacted a minimum of 5,500 cryptocurrency accounts associated with Atomic Wallet. Subsequent evaluations by crypto analytical establishments, including Elliptic, traced the heist back to Lazarus Group, a North Korean cybercrime consortium infamous for stealing billions in cryptocurrency. However, while initial fingers pointed at Lazarus, emerging allegations hint at a potential alternate perpetrator.

According to Feldman, recent revelations suggest a strong possibility of Ukrainian hackers masterminding the breach. His firm, Destra, in collaboration with blockchain analytics enterprise Match Systems, has been meticulously investigating the case. Feldman noted, “Evidence increasingly hints at the involvement of Ukrainian hacking syndicates.”

Atomic Wallet’s Response: The Unveiling of Probable Causes

While Atomic Wallet refrained from specifying the exact root causes behind the June exploit, they delineated four likely scenarios:

  1. Virus presence on user devices.
  2. Direct breach of their infrastructure.
  3. A man-in-the-middle assault.
  4. Malware code intrusion.

Furthermore, Atomic Wallet stressed that a mere 0.1% of their application’s users faced the ramifications of this breach.

Despite the enormity of the breach, Atomic Wallet resumed its operations shortly after the incident, sparking additional concerns among its user base.

Atomic Wallet’s future stands at a crossroads in light of these revelations. The eventual outcome of this lawsuit and the subsequent revelations may chart a new course for the cryptocurrency platform.

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