The wallet service provider was the victim of a hack in 2023 that caused losses of over $100 million.
The Malaysian Securities Regulatory Authority has added Atomic Wallet, a Web3 wallet service, to its list of financial institutions banned from operating in the country, according to the agency’s website.
Atomic Wallet was warned for “operating a digital asset exchange (DAX) without registration,” according to the website.
The regulator did not provide further details, but Atomic Wallet was the victim of a hack in 2023 that caused losses of over $100 million and has been the subject of litigation since then.
The company joins several other cryptocurrency companies that the commission has banned from operating in the Asian country, including Crypto Trade Malaysia and Best Exchange. Atomic Wallet describes itself as a secure, decentralized, anonymous crypto wallet for staking and exchanging over 100 digital assets.
Hacking incident
In 2023, a group of users sued Atomic Wallet in the United States after the Web3 wallet provider fell victim to a cybersecurity breach.
According to an analysis conducted by Elliptic, losses exceeded $100 million, with some users reporting losses of their entire cryptocurrency portfolios.
The exploit was reportedly linked to the North Korean hacker group, the Lazarus Group, which allegedly transferred the stolen funds to Cambodian cryptocurrency exchange Phuone Pay.
A US federal judge dismissed the class action lawsuit later that same year because the court failed to prove jurisdiction over the Estonian cryptocurrency company. In December 2023, Atomic Wallet launched a $1 million bug bounty bid to find security vulnerabilities in its wallet software.
Growing Cyber Threats
Losses from cryptocurrency fraud, hacks, and exploits increased by about 21% year-over-year in 2024 as hackers targeted private keys on centralized exchanges and Web3 wallets.
In a blog post published on December 19, Chainalysis said $2.2 billion in funds were stolen in 303 incidents in 2024, up from 282 in 2023.
Private key breaches were the largest proportion of cryptocurrency stolen in 2024, accounting for 43.8%, according to Chainalysis research. Centralized exchanges turned out to be the most common target.
“2024 saw a significant shift in cryptocurrency attacks, with centralized organizations becoming more prominent targets,” Jan Raussis, cybersecurity expert and co-founder of DeFi ecosystem SmarDex, told Cointelegraph.
