Over $35 million reportedly stolen from Atomic wallet users

Over $35 million reportedly stolen from Atomic wallet users

The week started darkly after a large-scale theft of digital assets from Atomic Wallet users, resulting in a six-figure loss across various chains.

Dismayed users have taken to Twitter to dispute some of Atomic Wallet's claims after the company assured them that it was working with "leading security companies" and had reached out to organizations that could help trace the stolen funds.

Largest victim loss: approximately $8 million

According to pseudonymous on-chain detective ZachXBT, the largest loss suffered by a user in the Atomic Wallet hack was $7.95 million in Tether (USDT) on the Tron blockchain. Further investigation revealed that the five biggest losses amount to a whopping $17 million.

In the latest update, ZachXBT, which previously confirmed receiving numerous messages from wallet users regarding their lost funds, estimated that the total amount of stolen funds may have exceeded $35 million.

Atomic wallet, in one opinion announced on June 5 that less than 1% of its monthly active users were affected by the exploit. The team behind the wallet service also added that the last deleted transaction was confirmed over 40 hours ago, a claim that was challenged from several community members.

No compensation plans have been announced to date. Atomic Wallet was unable to determine the cause. While some users reported that their digital assets were stolen after a recent software update, others reported being affected despite not having updated to the latest version.

Previous warning signs

Following the episode, a security disclosure from February 2022 resurfaced, revealing several vulnerabilities in Atomic Wallet.

Least Authority's security research team conducted a thorough security review in March 2021 and said they discovered vulnerabilities in the wallet's system design that put users at significant risk.

The report was submitted to Atomic in April. The Berlin-based security consulting firm concluded that Atomic sent them a response seven months later highlighting their updates and improvements, but that "a significant number of issues and suggestions remain unresolved."

It had issued an alert “strongly recommending” that the Atomic Wallet team immediately inform users about the existing security vulnerabilities. Least Authority further added:

“Furthermore, we strongly advise against the deployment and use of the Atomic Wallet until the issues and suggestions outlined in the report have been adequately addressed and the Atomic Wallet has undergone subsequent security reviews.”

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