Atomic Wallet Freezes $2M in Suspicious Crypto Transactions

The wallet provider, in collaboration with blockchain analytics firms and crypto exchanges, cracked down on a threat actor.

Atomic wallet worker putting up caution sign, as the land gets hit by an atomic lawsuit.
Created by Kornelija Poderskytė from DailyCoin
  • Atomic Wallet has seized funds linked to illicit activities.
  • The wallet provider collaborated with intelligence firms and crypto exchanges to trace the stolen assets in questionable deposits.
  • The assets may be connected to Atomic Wallet’s previous security breach.

The persistent threats of cyber attacks and security breaches have long loomed over the cryptocurrency industry, casting a shadow of concern over industry firms and investors.

In June 2023, cryptocurrency wallet provider Atomic suffered a major security breach that siphoned off millions of dollars in assets, leaving the exchange and users to grapple with a tumultuous aftermath. The incident prompted the wallet provider to double down on its defenses, catalyzing heightened security awareness to combat crypto outlaws.

Assets Seizure in Illicit Activity 

On October 19th, Atomic Wallet revealed that it partnered with blockchain analytics firms Chainalysis and Crystal to track and freeze stolen crypto assets valued at over $2 million.

The operation came in response to several user reports claiming unauthorized transactions from their wallets.

The ill-gotten gains had taken a winding path as the ‘threat actors’ attempted to obfuscate their tracks using various laundering techniques such as mixers and complex bridging methods. The hackers further cunningly routed the stolen assets through decentralized protocols in more attempts to mask their source.

However, the crafty maneuvering left a trail of breadcrumbs. The assets were deposited on unnamed centralized cryptocurrency exchanges, allowing the wallet provider, in collaboration with the analytics firms, to trace back to the Tron and Bitcoin blockchains.

The assets were subsequently frozen to prevent further illicit activities.

Atomic acknowledged the exchanges’ cooperation, highlighting the importance of collaboration in safeguarding the industry from persistent hacks.

The Atomic Wallet Hack

On June 2, 2023, Atomic Wallet fell victim to a cyber attack that inflicted losses totaling a staggering $100 million loss for the wallet provider and its users.

Following the incident, Atomic Wallet was hit by a barrage of class-action lawsuits filed by aggrieved users, further exacerbating its existing troubles. The users accused the exchange of negligence and unlawful conduct and sought compensatory damages. 

While the cause of the hack remained undisclosed, the wallet provider reassured users of efforts to retrieve the stolen assets and strengthened security measures.

On the Flipside

  • The connection between the threat actors in the new attack and the perpetrators of the June Atomic hack remains uncertain.
  • The infamous North Korean-backed hacker group Lazarus, also known as the Guardians of Peace or Whois Team, was linked to the Atomic Wallet hack.
  • The persistent hacks and attacks have prompted financial regulators to impose more stringent guidelines on the cryptocurrency industry to ensure investor protection.

Why This Matters

The success of Atomic Wallet, in collaboration with blockchain analytics firms and crypto exchanges in tracking down and freezing illicit funds, serves as a beacon of hope for a more secure cryptocurrency industry in the face of growing threats.  

To dive deeper into the infamous Lazarus group and their connection to major industry hacks, read here:
New Lazarus Group Malware Threat Places Crypto On High Alert 

Coinbase is set on expanding its service globally despite regulatory challenges and restrictions. Read more:
Coinbase Targets Ireland as Preferred Hub For EU Expansion

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Grace Abidemi

Grace Abidemi, a cryptocurrency reporter at DailyCoin, covers industry developments and trends. She previously worked as a freelance writer. With a Bachelor's degree in German Language and certifications in marketing and storytelling, Grace creates engaging content. When not working, she's in Nigeria, mastering cooking and canvas painting, and enjoys learning about different cultures and languages.