Security breach at Atomic Wallet results in $35 million losses
Decentralized wallet platform Atomic Wallet has reportedly suffered a security breach, resulting in losses of at least $35 million in cryptocurrency assets by June 2.
“We have received reports of wallets being compromised. We are doing all we can to investigate and analyze the situation. As we have more information, we will share it accordingly,” said Atomic Wallet via Twitter on June 3.
ZachXBT, a pseudonymous Twitter user known for tracking stolen crypto funds and assisting hacked projects, conducted an analysis of the breach and estimated the total losses to surpass $50 million potentially.
Despite claims from Atomic Wallet that they are investigating the incident, affected users have expressed frustration over the lack of concrete information provided by the platform.
Per Atomic Wallet’s Terms of Service, the platform accepts no liability for on-chain damages suffered by its users, limiting its responsibility to a maximum of $50. This further exacerbates the concerns of victims who suffer substantial losses.
The team at Atomic Wallet has been relatively quiet about the incident, with only two official communications issued so far.
In a recent tweet, the support team said they collected victim addresses and collaborated with major exchanges and blockchain analytics companies to trace and block the stolen funds.
However, victims who have reached out to Atomic Wallet have faced a barrage of questions regarding their internet providers, use of virtual private networks, and storage of seed phrases.
Speculation within Telegram’s community channels suggests that the exploit could have originated from an outdated dependency package.
Atomic Wallet under scrutiny
Following the security breach and losing millions of dollars in users’ cryptocurrency, Atomic Wallet faces mounting concerns and intense scrutiny. The platform acknowledges the compromise and pledges to investigate the apparent vulnerability that led to the hack.
Atomic Wallet, which has been available since 2017 and has over 5 million downloads, has previously faced criticism regarding its security measures.
Auditing firm Least Authority flagged concerns in February 2021, saying that Atomic Wallet is “insufficiently secure in protecting user assets and private data.”
While the exact nature of the attacks is yet to be confirmed, Atomic Wallet assures its users that it is working with leading security companies to investigate the breach.
In the aftermath of the incident, Atomic Wallet’s ERC-20 token AWC plummeted. Currently, down over 13 percent to $0.22 in the past 24 hours, the token experienced a 96 percent decline from its all-time high of $7.26 in May 2021.
Other crypto-related security breaches
The incident adds to the growing list of crypto-related security breaches, including the $7.5 million exploit of Jimbos Protocol and a malicious proposal that took control of Tornado Cash’s governance.
A report by Chainalysis reveals that crypto hackers stole $3.8 billion in 2022, primarily through targeted attacks on decentralized finance protocols linked to North Korea.
Research from Immunefi reveals that in the first quarter of 2023 alone, $440 million was stolen across 73 incidents, with hacks accounting for 95 percent of the funds lost.
A TRM Labs analysis revealed that despite the number of incidents remaining the same, the average hack size dropped from nearly $30 million in Q1 2022 to $10.5 million in Q1 2023.
Choosing the right wallets and crypto exchanges is crucial for your funds’ safety, so you should always rely on your research and reviews by crypto experts.
