Atomic Wallet and Chainalysis Join Hands to Seize $2M Following Suspicious Deposits

Atomic Wallet has frozen over $2 million after detecting suspicious deposits in a partnership with prominent exchanges. 

According to an announcement on October 18, 2023, Atomic Wallet has sought the assistance of blockchain intelligence firms Chainalysis and Crystal in its effort to identify and contain these unlawfully obtained funds resulting from an undisclosed hack.

The majority of these assets were identified as originating from the Tron and Bitcoin blockchains after passing through decentralized protocols in an attempt to hide their source. 

In its announcement, Atomic Wallet expressed gratitude to centralized cryptocurrency exchanges for their swift collaboration in freezing assets linked to reported transactions. 

The crypto wallet provider noted that its prompt response and cooperation were instrumental in minimizing the impact of the incident that affected some users.

Atomic Wallet Still Reeling From Hack

This latest development followed a significant hack that Atomic Wallet experienced in June 2023, resulting in the reported loss of about $100 million in stolen cryptocurrency assets. 

While Atomic Wallet did not clarify the specific circumstances surrounding the exploit, it was revealed by a blockchain investigator, MistTrack, that the hackers employed THORChain for this purpose. 

As noted by Mistrack, the hackers could be the dreaded North Korean hackers. In addition, to further hide their tracks, the hackers used the Swift blockchain to transfer some of the stolen Ether to multiple Bitcoin addresses.

According to a blog statement, Atomic Wallet emphasized that it took proactive measures by alerting users through their social media channels about a potential attack. 

The firm noted that it immediately suspended all app downloads and updates as a precaution. It also contacted major exchanges and engaged leading blockchain analysis companies to initiate an investigation.

However, Atomic Wallet revealed that it does not hold custody of users' funds and that developers have never had access to them. 

The company assured its users that “less than 1%” of its user base had been affected while adding that clients' crypto assets are securely stored on the blockchain, with private keys encrypted on users' local devices.

In August 2023, a group of Atomic Wallet users affected by the breach reportedly initiated a class action lawsuit against the company. 

The group claimed that the company had yet to conduct a technical inquiry and had not provided any information to its users.

However, whether the latest frozen funds are connected to the previous hack remains unclear.