Recent reports have emerged indicating that Atomic Wallet, a non-custodial decentralized wallet, has experienced a significant security breach resulting in users suffering complete losses of their cryptocurrency portfolios.
As a non-custodial solution, Atomic Wallet places the responsibility for safeguarding assets squarely on the users themselves. The reported exploitation serves as a sharp reminder of the risks involved in self-custody and highlights the importance of maintaining strong security practices to protect digital assets stored within such wallets.
Reports started coming in early June 3rd, when Atomic Wallet, which boasts a reported user base of more than five million customers, announced on Twitter that they had received distressing complaints that some users had their accounts compromised.
After the Atomic Team acknowledged the complaints of account compromises on Twitter yesterday, multiple users commented on the post reporting losses, claiming funds have been wiped from the digital wallet app.
The team assured users that they are actively investigating the incidents, with the assistance of on-chain sleuth ZachXBT, renowned for his expertise in tracing stolen funds and aiding hacked projects. However, as of now, no official updates have been provided, and the exact nature and execution of the attack remain unclear.
Twitter users have also reported that this was not the first time it happened, citing previous instances when where their funds had been stolen from the Atomic Wallet app. One user recalled an incident from six months ago, where their BTC was allegedly taken, and stated that Atomic Wallet's response was to emphasize the importance of protecting passwords and seed phrases, which the user believed was irrelevant in their case. These accounts from users further highlight the concerns surrounding the security and trustworthiness of the Atomic Wallet app.
According to recent tweets by ZachXBT, a prominent on-chain sleuth involved in the investigation, there have been some positive developments regarding the Atomic Wallet hack. ZachXBT reported that approximately $1 million of the stolen funds has been successfully recovered. This recovery effort is a promising step toward mitigating the impact of the attack.
However, ZachXBT also tweeted about the extent of the losses suffered by the victims, mentioning that the largest single victim reportedly lost $7.95 million in USDT (Tether), a popular stablecoin in the cryptocurrency market. Additionally, the overall estimated amount stolen from the Atomic Wallet hack exceeds $35 million.
Growing Trend of Crypto Hacks
The recent exploit on Atomic Wallet adds to the escalating number of crypto hacks occurring lately. Just a few days prior, on May 28, the DeFi app Jimbos Protocol experienced an exploit that resulted in the loss of 4,000 Ether (ETH), equivalent to approximately $7.5 million.
Similarly, Tornado Cash, a decentralized cryptocurrency mixer, fell victim to a recent hack. On May 20, an attacker managed to grant 1.2 million votes to a malicious proposal, gaining full control over the protocol's governance.
Last year alone, crypto hackers managed to steal approximately $3.8 billion in funds according to a report by Chainalysis, with a significant portion of the thefts attributed to North Korea-linked attackers exploiting decentralized finance (DeFi) protocols
These Incidents underscore the ongoing need for robust security measures within the crypto industry and serve as a stark reminder of the persistent threats faced by the crypto industry. As hackers continue to evolve their tactics, it is crucial for individuals and platforms to remain vigilant and implement effective safeguards to protect user funds and mitigate the risk of cyber attacks.