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Atomic Wallet Parent Company Seeks Dismissal of $100 Million Lawsuit, Citing Jurisdictional Challenge

Ruholamin Haqshanas
Last updated: | 2 min read
Source: Pixabay

The parent company of Atomic Wallet, a popular cryptocurrency wallet, has filed a motion in a United States court seeking the dismissal of a class action lawsuit. 

The lawsuit, which seeks damages totaling $100 million, alleges that the company failed to adequately protect user funds following a major hack. 

The Estonian-based firm argues that the claims should have been filed in Estonia, where the company is headquartered.

In the dismissal motion filed last week in a Colorado District Court, the company claimed that it has no significant ties to the United States and that its end-user license agreement explicitly requires any litigation to be pursued in Estonia. 

Atomic Wallet’s defense further emphasizes that, according to their records, only one user in Colorado was allegedly impacted by the hack.

Atomic Wallet Argues the Negligence Claims Lack Legal Merit

In the filing, Atomic Wallet claimed that the affected users agreed to the terms of service, which include a disclaimer of liability for theft-related losses and a cap on damages at $50 per user. 

The company added that the negligence claims made by the plaintiffs lack legal merit, as there was no legal duty established to maintain the security of Atomic Wallet or protect against hacking.

The Estonian-based wallet provider also refuted allegations of fraudulent misrepresentation put forth by the plaintiffs. 

As reported, the class action was initiated in August, two months after the $100 million exploit on Atomic Wallet, which affected approximately 5,500 users. 

Although the Lazarus group is widely believed to be responsible for the attack, there are also speculations that hacking groups from other countries might be involved. 

Boris Feldman, the co-founder of Destra Legal, a lawyer for the plaintiffs in the case believes the attack was the product of a Ukrainian group.

According to him, his firm has worked with Match Systems, a blockchain analytics company that conducted its investigation with the investors and found “traces of involvement among Ukranian hacker groups.”

Crypto Hacks Continue to Take Victims

Crypto hacks and security incidents have continued to take victims so far in November. 

Earlier this month, DeFi platform Raft suffered a hack resulting in the loss of approximately $3.3 million in Ethereum ( ETH).

Raft’s hack marked the second major crypto exploit on the same day. Earlier, an attacker drained approximately $114 million in digital assets from the centralized exchange Poloniex.

Over the weekend, decentralized exchange dYdX used its insurance fund to cover losses amounting to $9 million resulting from a “targeted attack” against the exchange.

The alleged attack specifically targeted long positions in YFI tokens on the exchange, resulting in the liquidation of positions worth nearly $38 million. 

Juliano suspected that trading losses incurred by dYdX, along with the significant decline in YFI, were the result of market manipulation.