Investors Sue Atomic Wallet for Inadequate Security Measures Leading to a Loss of Around $100 Million

The cryptocurrency market often finds itself amidst legal conflicts and a victim in the hands of the hacker. The most recent news on Atomic Wallet is one such example. A group of investors have filed a class action lawsuit against Atomic Wallet, a non-custodial cryptocurrency wallet provider stating that the company was negligent in their security practices. This lawsuit follows the massive security breach that occurred in June 2023 which led to a staggering loss of over $100 million in cryptocurrency. Various high-net-worth investors from Russia and the Commonwealth of Independent States have joined forces in claiming their compensation and have accused the company of not adequately responding to the hack.

Background of Atomic Wallet 

Atomic Wallet is one of the prominent players in the sector of decentralized wallets and accommodates several cryptocurrencies. Its user-friendly interface with both the mobile and the desktop versions makes it a likely option for investors to securely manage their crypto portfolio. Atomic Wallet was launched in 2012 as Atomic Swap by Konstantin Gladych, the CEO and co-founder of Changelly, Atomic Wallet. Since its launch, the platform gained immense popularity with its enhanced features of security alongside maintaining privacy, speed, and anonymity. Atomic Wallet supports more than 500 cryptocurrencies today.

The case against Atomic Wallet

The recent case against Atomic Wallet traces back to the hack that occurred in June 2023 resulting in the loss of over $100 million and affecting around 5500 cryptocurrency accounts. Investors believe that this security breach was a result of Atomic Wallet’s negligence in adopting robust security measures to protect the user’s fund. As a result, a group of investors from Russia and the Commonwealth Independent States joined hands in filing a class action lawsuit against Atomic Wallet seeking compensation. As per the latest report by IntelliNews, investors, along with German lawyer Max Gutbrod and Boris Feldman, co-founder of Moscow legal-tech firm Destra Legal, are actively pursuing their case against the wallet provider.

The plaintiffs claim that the hackers were able to identify the vulnerability in Atomic Wallet’s security system to gain access to the user’s account. Around 50 investors had collectively lost over $12 million as a result of the attack. To make matters worse, Atomic Wallet did not adequately address the situation, failing to provide any information to the clients about the hack nor did they report the incident to law enforcement. 

The co-founder of Destral Legal, Boris Feldman stated that the evidence shows the hack being orchestrated by a group of Ukrainian hackers based on the findings from their collaboration with Match Systems, a blockchain analytics firm. 

The outcome of this lawsuit is likely to have a major impact on the cryptocurrency industries as the investors are not just seeking financial compensation but transparency and accountability for the wallet provider. This incident also highlights the importance of adopting robust security measures for these companies to safeguard the users and take proactive steps to respond to such situations. Though the legal battle is at its early stage, however, it serves as a reminder to cryptocurrency investors about the market risks. 

Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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