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Atomic Wallet exploited, users report loss of entire portfolios

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Atomic Wallet has been apparently exploited, with users on Twitter reporting complete losses of their crypto portfolios. Atomic is a noncustodial-decentralized wallet, meaning users are responsible for assets stored in the application. 

“We have received reports of wallets being compromised. We are doing all we can to investigate and analyse the situation. As we have more information, we will share it accordingly,” said Atomic’s team on Twitter on June 3.

A number of users have commented on the post reporting losses, claiming funds were wiped out from their digital wallet app. On-chain sleuth ZachBTX, known for tracing stolen funds and assisting hacked projects, is taking part in the investigation. At the time of writing, it’s unclear how the attack was carried out. Atomic claims to have over 5 million users.

Twitter users have also reported that funds on the Atomic Wallet app have been stolen in the past. “This happened to my BTC 6 months ago with Atomic. They simply replied back to protect your pw, seed phrase, blah blah… I told them NOT even possible! All I do is use U to exchange and then move crypto out. My response to them, I will use U no MORE then! Now I was right!,” wrote a user in response to the post.

The attack joins a growing list of crypto hacks taking place every week. Decentralized Finance (DeFi) app Jimbos Protocol was exploited on May 28, resulting in a loss of 4,000 Ether worth around $7.5 million. Tornado Cash, a decentralized crypto mixer, was also recently hacked. On May 20, an attacker successfully granted 1.2 million votes to a malicious proposal, gaining full control of the protocol’s governance.

Crypto hackers stole an estimated $3.8 billion last year, mainly from North Korea-linked attackers and DeFi protocols, according to a Chainalysis report. Another analysis from TRM Labs reveals that while the number of incidents remained the same in the first quarter of 2023, the average hack size dropped to $10.5 million from nearly $30 million in the first quarter of 2022.

“Unfortunately, this slowdown is most likely a temporary reprieve rather than a long-term trend,” TRM Labs noted, warning that just a few large-scale attacks could tip the scales again.

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