Estonia-Based Atomic Wallet Seeks Dismissal of $100 Million Hack Lawsuit

Estonia-Based Atomic Wallet Seeks Dismissal of $100 Million Hack Lawsuit

| Updated
by Temitope Olatunji · 3 min read
Estonia-Based Atomic Wallet Seeks Dismissal of $100 Million Hack Lawsuit
Photo: Shutterstock

Atomic Wallet states that most of the users impacted by the hack do not actually reside in the United States, and only one plaintiff out of the entire class action lawsuit is based in Colorado, where the suit was initiated.

Crypto wallet company Atomic Wallet, based in Estonia, has asked a United States court to dismiss a class action lawsuit brought against it. The lawsuit seeks financial compensation related to a hack earlier this year that resulted in $100 million stolen. Atomic Wallet argues that the lawsuit should not have been filed in the US since the company has no business connections or operations there. Instead, Atomic Wallet contends that any legal action should take place in Estonia, where the company is headquartered.

Atomic Wallet’s Request to Dismiss Lawsuit

In its request to dismiss the lawsuit, submitted on November 16th to a District Court in Colorado, the crypto wallet provider stresses that its user agreement mandates that any lawsuits against the company must be filed in Estonia. Atomic Wallet also states that most of the users supposedly impacted by the hack do not actually reside in the United States. The company highlights that only one plaintiff out of the entire class action lawsuit is based in Colorado, where the suit was initiated.

Additionally, the company asserts that the more than 5,000 users impacted by the hack had agreed to the company’s terms of service when they initially signed up for the wallet. These terms explicitly state that Atomic Wallet cannot be held liable for losses due to theft, and limits any damages to $50 per affected user. Atomic Wallet argues that Colorado law does not impose any legal obligation on companies to maintain security protections and safeguard against hacking incidents.

The Estonia-based company also rejects accusations made by the plaintiffs that it engaged in fraudulent misrepresentation, saying they can’t be justified.  The class action lawsuit was initiated in August, two months following the $100 million hack of Atomic Wallet, which impacted more than 5.000 users of the company’s wallets.

The Company Has Not Been Detailed About the Cause of the Successful Exploit

The Atomic Wallet breach is regarded as one of the biggest cryptocurrency thefts so far in 2023. Hacking groups from North Korea and Ukraine have been suggested as potentially being behind the exploit. However, the individuals who launched the lawsuit allege that the wallet provider failed to be transparent about vulnerabilities in its security system that enabled the hack to occur. One of the troubling issues was that it appeared that the platform’s operations were not disrupted by the hack, raising questions about whether the platform properly rectified the security flaws that led to the successful attack, giving users more doubts and concerns.

So far, the crypto company has not provided a detailed explanation for what led to the successful exploit, leaving the users in the dark. The public was only made aware of four potential causes of the breach, which were described as a virus in users’ devices, a man-in-the-middle attack, an infrastructure bridge, or malware code injection.

While Atomic Wallet maintains that it should not be held legally liable for the losses, especially in the United States, the outcome of its dismissal motion is unknown. It remains to be seen how this case will turn out in the near future.

Blockchain News, Cryptocurrency News, Cybersecurity News, News, Technology News
Related Articles