Estonian wallet provider Atomic Wallet did not elaborate on the hack, which forensics firm Elliptic estimated cost investors $100 million.
The company last told its customers on June 8 that Chainalysis was investigating a hack affecting less than 1% of its customers.
Atomic Team’s track record threatens user trust
Elliptic confirmed yesterday that potential Lazarus hackers have stolen $100 million from more than 5,000 atomic wallets. Lazarus is a North Korean hacker group responsible for stealing more cryptocurrency in 2022 than in any other year.
Team Atomic hasn’t updated its user base since June 8th tweet He admits that Chainalysis was investigating the hack. The company said it managed to freeze $1 million in stolen assets, but a new money laundering method implemented by the attacker has complicated further progress.
The atomic breach also comes at a critical time for Web3 users, who may need to consider holding cryptocurrencies after the US Securities and Exchange Commission (SEC) recently sued Binance for mismanaging customer funds.
In February 2022, the security firm Least Authority described Atomic Wallets as “a system… that puts existing users of the wallet at significant risk.”
The company found that many issues remained unresolved when Atomic requested a follow-up audit in November. Least Authority has publicly disclosed its concerns about the platform and has recommended that customers not use it.
How the Atomic Wallet Breach Harms Crypto Users
Web3 companies generate distrust of decentralized finance protocols by not reporting violations and outages in a timely manner.
Cybersecurity firm Anchain.ai recently noted that Web3 companies respond only 40 days after a hack, compared to five hours for a traditional cyberattack.
In addition, Varonis reports that notifying customers costs about $740,000 in the United States. The total cost of the data breach could reach $4 million.
Multichain, the team behind its namesake cross-chain router, has provided a few updates after several cross-chain routes were inexplicably blocked last month.
Several days after users discovered the issues, the team confirmed that the CEO could not be contacted to grant access to the server required for further maintenance.
The lack of intrusive connectivity has prompted Binance to stop deposits for some of the networks supported by Multichain.
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