March 2, 2024

Atomic Wallet gives major update on hack but questions remain unanswered

The statement is the first major update from the wallet provider since the exploit in early June, but users are still in the dark about the actual cause.

Atomic Wallet users have been left wanting more answers, despite the decentralized wallet provider finally releasing a full “event statement” about the June exploit — which some estimate has run up to $100 million in losses.

In a June 20, blog post — the first major update from the firm since the June 3 exploit — Atomic Wallet claimed there have been no new confirmed cases after initial reports of the hack.

It has reiterated that “less than 0.1%” of app users were affected. Atomic Wallet has made the claim at least once before in a now-deleted June 5 tweet. The figure is still rebuffed by many online.

Atomic Wallet didn’t point to what exactly led to the exploit, only laying out the four most “probable” causes, including a virus on user devices, an infrastructure breach, a man-in-the-middle attack or malware code injection.

However, none of these scenarios “are confirmed as potentially causing massive breaches,” said Atomic Wallet, while adding its “security infrastructure has been updated.”

Additionally, Atomic Wallet said an app update to boost security is being worked on, which is verified “by external auditors.”

However, questions have been swirling around certain aspects of the June 20 statement.

Former smart contract audit head at cybersecurity firm Hacken, Yevhenii Bezuhlyi, asked who the mentioned “external auditors” are and where users can find their statements.

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Ouriel Ohayon, the CEO of rival wallet provider ZenGo asked why Atomic Wallet needed to update its security infrastructure and what happened for it to undertake such a measure.

Others highlighted the wide array of probabilities posed by the firm as evidence it was no closer to understanding how the exploit took place.

Atomic Wallet said it can see the laundering and mixing of user funds, most of which remain traceable. It’s engaged the help of blockchain analytics firms Chainalysis and Crystal Blockchain. It said that the investigation is still ongoing.

Chainalysis told Cointelegraph it can’t comment on its work or findings relating to Atomic Wallet.

Cointelegraph contacted Atomic Wallet for clarity on aspects of its statement. Crystal Blockchain was also contacted for comment on its findings related to Atomic Wallet.

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