Lawsuit Filed Against Atomic Wallet Following $100M Crypto Hack Losses: Report

In a significant development, a coalition of cryptocurrency investors has initiated a collective lawsuit against Atomic Wallet, which faced a devastating breach resulting in losses amounting to $100 million back in June.

The class action comprises several well-to-do investors hailing from Russia and the Commonwealth of Independent States, as per a recent report from German business media agency BNE IntelliNews on August 21.

Steering this legal action are German lawyer Max Gutbrod and Boris Feldman, co-founder of Moscow-based legaltech firm Destra Legal.

Gutbrod, a former partner at Baker & McKenzie in Moscow with more than two decades of experience, revealed that around 50 clients who collectively lost $12 million due to the aftermath of Atomic Wallet’s breach are being represented in the case. Gutbrod stated:

“Our priority is to recover assets for our clients, and we are in the process of filing a class action against Atomic Wallet. They failed to provide any information regarding the hack to our clients or even report it to the authorities.”

Atomic Wallet, recognized as a noncustodial cryptocurrency wallet, fell victim to a massive exploit of $100 million in mid-June 2023. The breach had a direct impact on over 5,500 cryptocurrency accounts on the platform. Subsequent to the event, crypto analytics firms such as Elliptic pointed towards the Lazarus Group, a North Korean cybercriminal team known for orchestrating crypto thefts worth billions, as the potential culprits behind the incident.

Although initial speculations pointed to the involvement of Lazarus in the Atomic Wallet hack, the latest claims present an alternate possibility. According to Feldman, the hack is more likely to have been orchestrated by a Ukrainian group. Feldman’s firm, Destra Legal, collaborated with blockchain analytics firm Match Systems, which conducted an independent investigation on behalf of the affected investors.

Feldman commented, “They have identified indications of Ukrainian hacker groups being involved in the breach.”

Atomic Wallet, in the aftermath of the hack, refrained from disclosing the specific triggers that led to the exploit in June. The company, however, outlined four potential factors deemed “plausible,” including a virus affecting user devices, a breach in the infrastructure, a man-in-the-middle attack, or the injection of malicious code. Throughout the incident, Atomic Wallet consistently emphasized that less than 0.1% of their application’s users were impacted.

Curiously, despite the hack, the cryptocurrency wallet seemingly continued to function without any noticeable disruption.

As of now, Atomic Wallet has not responded to requests for comments regarding the ongoing lawsuit and allegations.

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