Atomic Wallet Embarks on Security Investigation After $35 Million Hack

Atomic Wallet, a widely used self-custodial and decentralized crypto wallet, has fallen victim to a massive security breach. Initial reports suggest that a staggering $35 million worth of users’ cryptocurrency has been stolen, leaving countless users in a state of shock and concern.

According to an official follow-up tweet from the Atomic Wallet, security teams are now working to ascertain the cause behind this significant breach as users recount narratives of lost tokens, wiped transaction histories, and the complete loss of their crypto portfolios. The firm maintained that the incident affected just less than 1% of its active users.

In a move aimed at mitigating any further compromises and stemming the spread of the breach, the Atomic Wallet development team promptly shut down their download server, ‘get.atomicwallet.io.’ This measure signifies their concern that their software might have been compromised, highlighting the urgency to prevent any additional breaches.

Atomic Wallet and It's Security Investigation

The shocking breach at Atomic Wallet has raised serious questions about the platform’s security protocols. Even though Atomic Wallet has been in existence for several years, it appears that no system is entirely immune to hacking attempts. That’s why some voices in the crypto community have emphasized the importance of adopting multi-signature (multisig) solutions for long-term asset storage to ensure greater peace of mind.

While acknowledging the inconvenience associated with multisig setups, proponents argue that such arrangements provide added security in the event of hardware wallet loss or seed phrase compromise.

Recovery Efforts Underway as Atomic Wallet Engages Experts

ZachXBT, a popular on-chain investigator, has also joined the pursuit of the stolen funds, unearthing additional victims who have suffered losses. The sleuth revealed that the five largest losses alone account for $17 million. However, some of the funds lost may be recoverable, as ZachXBT was able to assist in recovering $1 million worth of funds with the help of Buffalo, the pseudonymous CEO of Jito Labs, and an employee at the MEV infrastructure company.

Furthermore, Atomic Wallet has initiated a comprehensive survey, soliciting information from victims regarding their operating system, software download location, recent actions preceding the theft, and backup phrase storage location. These details will help identify potential attack vectors and reinforce security measures to safeguard users’ assets.

The support team is also collecting victim addresses while collaborating with major exchanges and blockchain analytics companies to trace and block the stolen funds.

AWC token price declines

The aftermath of the breach has had effects on Atomic Wallet’s native ERC-20 token, AWC. Following the incident, AWC experienced a sharp decline of over 13% in value, plummeting to $0.21. However, as Atomic Wallet commenced its investigation and assured users of its ongoing efforts, the token price rebounded by 2.6%, according to CoinGecko data.