Investing

Atomic Wallet Sued by Russian Users Over $100M Hack and Lack of Action

Tim Fries

Published: August 23, 2023 11:30 pm

Last Updated: August 24, 2023 10:33 am

Atomic Wallet, a crypto firm that sustained a $100 million exploit earlier this year, has been sued by Russian investors who lost $12 million in the aftermath of the hack. The move comes as Atomic failed to provide enough clarity on the case, such as the main factors that contributed to it.

50 Russian Investors Launch Class-Action Lawsuit

A group of high-net-worth investors from Russia are launching a class action lawsuit against Atomic Wallet after losing significant funds in a $100 million hack targeting the crypto wallet in June. The lawsuit is co-ordinated by German lawyers Max Gutbrod and Boris Feldman, co-founder of a Moscow-based law firm Destra Legal.

According to BNE IntelliNews, Gutbrod said the lawyers represent around fifty investors who lost $12 million in the hack.

“We are working on recovering the assets for our clients and we will be filing a class action against Atomic Wallet […] They didn’t give our clients any information about the hack or go to the police to report it.”

– Gutbrod said.

Atomic did not yet provide clarification on what led to the June exploit. The crypto wallet maker only outlined four potential causes: a virus on user devices, an infrastructure breach, malware code injection, or the so-called man-in-the-middle cyberattack.

Meanwhile, other technical experts believe different factors may be behind the breach. For instance, Alexander Nazarov, lead dApp auditor at Hacken, said insufficient entropy in seed key generation could have led to the hack.

“If the seed is not sufficiently random, it becomes susceptible to brute-force attacks.”

– according to Hacken’s Nazarov.

Who Orchestrated the Attack?

The Atomic Wallet hack jeopardized an estimated 5,500 crypto accounts on the platform. Blockchain analytics firms like Elliptic initially linked the theft to the North Korean cybercriminal group Lazarus, which has reportedly stolen billions in crypto funds over the years.

However, more recent claims indicated a different culprit may have orchestrated the heist. According to Feldman, it is increasingly likely that Ukrainian hackers stole the money.

Feldman’s Destra Legal has been investigating the case with crypto analytics at Match Systems, which has also been probing the case on its own on behalf of affected investors. Feldman claims the two companies “have found traces of involvement of Ukrainian hacker groups.”

This article originally appeared on The Tokenist