In a significant turn of events, Atomic Wallet, a multicurrency digital wallet provider, has been hit with a class-action lawsuit in the United States over alleged security breaches and negligence, potentially impacting thousands of users globally.
The plaintiffs allege that the company's "negligent and unlawful" conduct led to the compromise of numerous user wallets resulting in the heist of $100 million.
The lawsuit, lodged in the U.S. District Court of Colorado on June 21, 2023, accuses Atomic Wallet of negligence in maintaining the security of user funds and failing to implement security measures against malicious attacks.
According to the lawsuit, an alleged security breach in June 2023 resulted in a $100-million dollar theft from user wallets.
The plaintiffs contend that the Estonian company failed in its duty, directly resulting in the loss of their funds.
"Defendants knew of existing security vulnerabilities in the Atomic Wallet platform since at least as early as 2022 but failed to take necessary security measures or precautions to protect user data and funds", it reads.
Moreover, another point is about the wallet's security breach exposing wallet holders' important passwords or security details (private keys) to bad actors as the device and confidential information were accessed remotely.
The filing also point out that Atomic Wallet's transaction fee structure, involving network fees and separate fees for trades in ETH, which reportedly "has no impact on the network fee size," has come under scrutiny. Atomic Wallet's partnership with exchanges and additional fees on those exchanges, amounting to 0.5% plus the exchange partner commission, are also being questioned.
The lawsuit seeks to represent a global class of all persons and entities outside the United States and nationwide class of all persons or entities in the U.S. who, within the applicable limitations period, purchased, repurchased, invested, and reinvested crypto assets on the Atomic Wallet platform and whose assets were reportedly stolen in the breach. Subclasses are also identified for Colorado and Connecticut residents.
"The Classes are comprised of thousands of consumers globally, who used the Atomic Wallet platform and whose assets were stolen in June 2023," the plaintiffs allege in their complaint. They argue that Atomic Wallet should have taken measures to prevent a security breach of this magnitude and that its failure to do so constituted negligence.
Plaintiffs are seeking actual, direct, and compensatory damages, along with punitive damages as appropriate. They're also seeking restitution and disgorgement of revenues, attorney’s fees, and costs pursuant to Federal Rule of Civil Procedure 54 or any other applicable provision or principle of law.
The filing of this lawsuit adds to the ongoing concerns about the security of cryptocurrency wallets. As the case progresses, it could set a significant precedent for the level of security and accountability expected from digital wallet providers.
Atomic Wallet has not yet commented on the filing.
This is a developing story and will be updated as more information becomes available.
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