Atomic Wallet executives summoned for questioning by Kazakh authorities

On June 13, Kazakh law enforcement authorities issued subpoenas for questioning to the management of the non-custodial wallet Atomic Wallet. ForkLog reported a representative of Match Systems, the firm conducting its own investigation into the case.

In addition, law enforcement requested server logs — the activity log in which all user actions on the site are recorded.

“Until now they had not been provided to any of the victims or to analytics firms investigating the incident on the victims’ side,” said Joseph Anderson, head of the investigations department at Match Systems, in a ForkLog interview.

He also noted that there is a conflict of interest between Atomic Wallet’s management and affected users, related to the non-custodial wallet’s refusal to disclose how the wallet operates.

“The service was marketed as a cold wallet, but for some reason kept all private keys on its side,” added Anderson.

Match Systems is currently handling the cases of affected Atomic Wallet users, totaling $14 million.

Earlier, in comments to РБК, representatives of the company said that the wallet developers are not cooperating with the investigation and refuse to provide any details on the technical side of the incident. This hampers an independent assessment of the breach, according to Match Systems.

On June 8, representatives of Atomic Wallet announced a joint investigation with analytics firm Chainalysis. The team said that the breach affected “less than 1%” of monthly active users, and the attack was halted on Saturday, June 3. In ответ on this, users on Twitter posted screenshots showing that their funds were still being stolen after the stated time.

Atomic Wallet had previously been criticised for inaction regarding vulnerabilities identified during the wallet audit.

Fuck you @AtomicWallet

Fuck you @gladkos

Fuck you @Changelly_team

Your security posture sucks, you refuse to listen to people, you aggressively silence people, and your products and services facilitate theft on a daily basis and have for years.https://t.co/lkpmDauNLO

— Tay ? (@tayvano_) June 3, 2023

“The identified security weaknesses indicate that Atomic Wallet likely ‘inadvertently retained’ users’ private keys, used to access funds on the wallet,” wrote cybersecurity researcher and MyEtherWallet founder Taylor Monahan.

The auditing firm Least Authority at the time said that “the Atomic Wallet system is not sufficiently designed from a security perspective and exposes wallet users to significant risk.”

As of June 2, several user accounts of the non-custodial wallet Atomic Wallet were compromised, resulting in losses of digital assets amounting to up to $35 million.

Subsequently, the stolen funds moved through the Sinbad.io mixer and the US-sanctioned Russian Bitcoin exchange Garantex.