Atomic Wallet knew of security flaws prior to breach, class action claims

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Atomic Wallet breach class action lawsuit overview: 

• Who: Robert Meany and Graham Dickinson filed a class action lawsuit against Atomic Wallet and its founder and CEO Konstantin Gladych. 
• Why: Meany and Dickinson claim Atomic Wallet knew of existing security vulnerabilities in its platform prior to a data breach earlier this month. 
• Where: The class action lawsuit was filed in Colorado federal court. 
• What are my options: Norton LifeLock provides data security options.

Cryptocurrency wallet Atomic Wallet knew of existing security vulnerabilities in its platform prior to a data breach earlier this month that resulted in the loss of more than $100 million in crypto assets, a new class action lawsuit alleges. 

Plaintiffs Robert Meany and Graham Dickinson claim Atomic Wallet knew its non-custodial decentralized wallet platform had security vulnerabilities at least as early as 2022, but “failed to take necessary security measures or precautions to protect user data and funds.” 

Meany and Dickinson argue Atomic Wallet had been advised by a crypto research and security group in early 2022 that existing security vulnerabilities could be placing the funds of its users at risk. 

“Defendants were informed that funds held in Atomic Wallet may be at risk due to these security vulnerabilities but took no measures to inform users of those risks or protect against those risks,” the Atomic Wallet class action states. 

Meany and Dickinson want to represent a nationwide class, global class, and Colorado and California subclasses of all persons or entities who purchased, repurchased, invested, and/or reinvested crypto assets in Atomic Wallet, and subsequently had them stolen during the June data breach

Atomic Wallet platform contained several security vulnerabilities, says class action

Security risks found in the Atomic Wallet platform included a lack of adherence to wallet system design and development standards and best practices, a lack of robust project documentation, and an incorrect use of Electron, a framework for building desktop applications, according to the Atomic Wallet class action. 

“Despite knowledge of security vulnerabilities, and recommendations by consultants to assess those vulnerabilities and protect user assets, Defendants failed to implement reasonable safeguards,” the Atomic Wallet class action states. 

Meany and Dickinson claim Atomic Wallet is guilty of negligence. They are demanding a jury trial and requesting an award of actual, direct, compensatory, and punitive damages for themselves and all class members. 

The Consumer Financial Protection Bureau posted a complaint bulletin in November 2022 that revealed an increase in consumer complaints revolving around cryptocurrency scams and fraud.

Were you impacted by the Atomic Wallet data breach? Let us know in the comments! 

The plaintiffs are represented by Douglass A. Kreis, Daniel J. Thornburgh, and D. Nicole Guntner of Aylstock, Witkin, Kreis & Overholtz.

The Atomic Wallet breacher class action lawsuit is Meany, et al. v. Atomic Wallet, et al., Case No. 1:23-cv-01582, in the U.S. District Court for the District of Colorado.

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