Atomic Wallet is facing pushback online after releasing a statement last week that avoided details of the massive theft of its users’ funds earlier this month.
The non-custodial decentralized portfolio company claims “less than 0.1% of Atomic app users have been affected” by the June 3 hack.
However, Atomic’s statement does not estimate the total amount of money stolen, indicate who was behind the hack, or reveal specific details about how the attack happened.
“The team has investigated several possible causes, the most likely being virus targeting of local users’ devices, infrastructure breach, malware code injection, or a man-in-the-middle attack. At this point, none of the potential issues are confirmed to potentially cause massive breaches, as such types of attacks are very difficult to spot.”
Elliptic, a blockchain analytics and compliance firm, has independently tracked compromised crypto wallets and estimates that over $100 million worth of crypto has been stolen. The company also conducted an analysis suggesting that North Korea’s state-sponsored hacking Lazarus Group orchestrated the theft.
In its statement last week, Atomic also chose not to disclose details of a repayment plan for its customers, though the company did say it was working with blockchain analytics firms Chainalysis and Crystal to track down the missing crypto.
“Our top priority is to help as many affected users as possible. We actively cooperate with investigators and authorities on crypto incidents. The next step is to work on a legal framework to confiscate frozen assets and distribute them to affected users.”
Atomic also appeared to shrug off responsibility for the breach.
“We want to assure you that Atomic Wallet as a company does not store or access users’ private keys, making the investigation into the cause more complex. Atomic is essentially a software application to manage users’ crypto on local devices. We do not ask for personal information, nor do we store user accounts, etc.
Atomic as a company has no guardianship; developers have never had access to users’ money. Crypto is only stored on the blockchain, with private keys encrypted on local users’ devices. However, anyone who has access to a user’s seed phrase can import it into another similar wallet app and access funds.
Atomic says no new cases have been reported since the initial incident on June 3, and the portfolio company also notes that its “security infrastructure has been updated.”
Ouriel Ohayon, CEO of crypto wallet company ZenGo, pressed Atomic on Twitter for more information on what that security update actually entailed.
“Our security infrastructure has been updated.”
why did you have to update it? what happened?
— Ouriel @ZenGo (@OurielOhayon) June 21, 2023
Other Twitter users beaten the company for not providing information about a compensation plan. Some criticized the company for not providing more details about how the hack actually happened, and others accused Atomic of intentionally hiding that information.
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