Atomic Wallet Hit With Lawsuit, North Korea's Lazarus Group Blamed For $100M Hack

Cryptocurrency wallet provider Atomic Wallet and its proprietor, Konstantin Gladych, are in the midst of a lawsuit due to a $100 million security breach allegedly executed by the Lazarus Group.

The individuals behind the lawsuit, representing themselves as well as other patrons of Atomic Wallet, argue that the actions of the platform — characterized as “negligent and unlawful” — were directly responsible for the breach affecting a significant number of user wallets.

“In many cases, users have lost entire portfolios,” DL News reported.

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What Happened: Atomic Wallet, which claims on its website to have been downloaded in excess of 5 million times, fell victim to a gargantuan cyberattack on June 3.

Preliminary reports estimate a loss of $35 million in an assortment of cryptocurrencies. However, blockchain security enterprise Elliptic on June 14 revised this estimate to $100 million. Elliptic’s investigation also alleged that the hack was the handiwork of the Lazarus Group, a cybercrime group believed to be run by the government of North Korea.

Lazarus Group reportedly pilfered $100 million from the Harmony blockchain's Horizon Bridge last year.

Central to the lawsuit is the accusation that Atomic Wallet was cognizant of “existing security vulnerabilities” as far back as 2022 “but failed to take necessary security measures or precautions to protect user data and funds.”

In early 2022, Atomic Wallet was forewarned about a crucial security flaw by Least Authority, a cryptocurrency research and security firm that Atomic Wallet had engaged for consultation.

“We strongly recommend that the Atomic Wallet team immediately notify users of the existing security vulnerabilities," Least Authority claimed. Least Authority’s evaluation also revealed that the “design and implementation of the Atomic Wallet system does not sufficiently demonstrate considerations for security and places current users of the wallet at significant risk.”

The legal action, instituted in the U.S. District Court of Colorado, posits that both Atomic Wallet and Gladych did not safeguard the assets, passwords or security information stored in Atomic Wallet's digital wallets.

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