Russian Investors File Class Action Against Atomic Wallet Following $100 Million Heist

A group of high-net-worth Russian and CIS investors have filed a class action lawsuit against Atomic Wallet, a prominent cryptocurrency platform, following a security breach in June that resulted in losses of approximately $100 million.

The lawsuit, coordinated by German lawyer Max Gutbrod and Boris Feldman of Moscow's Destra Legal, represents about 50 clients who claim losses totaling around $12 million. Individual losses range from $150,000 to as much as $2 million.

Mr. Gutbrod, in a statement to bne IntelliNews, expressed frustration over Atomic Wallet's handling of the breach. “They didn’t give our clients any information about the hack or go to the police to report it,” he said.

While initial suspicions pointed to the North Korean criminal gang, Lazarus Group, recent findings suggest a potential involvement of a Ukrainian hacker group. Feldman, citing investigations from blockchain analysis experts at Match Systems, noted, “They have found traces of involvement of Ukrainian hacker groups.”

The breach's aftermath has raised questions about the security measures of cryptocurrency platforms. Dyma Budorin, CEO of blockchain security firm Hacken told that Atomic Wallet might have inherent design flaws, suggesting that its recovery phrase generation could be susceptible to brute-force attacks by hackers.

Atomic Wallet, in a June 20 update, stated that "less than 0.1%" of its app users were affected. However, this claim was met with skepticism by many of its clients. The firm has yet to provide a detailed technical explanation for the breach.

The incident underscores the growing reliance on cryptocurrencies in Russia, particularly since the onset of the war with Ukraine. As sanctions tighten and the ruble faces decline, many Russians are turning to cryptocurrencies as a safeguard for their savings.