Atomic Wallet Hack: Stolen Cryptocurrencies End Up at North Korea-Linked Coin Mixer

In a significant development, it has been revealed that the stolen funds from the recent Atomic Wallet hack could be traced back to a coin mixer used by the notorious North Korean Lazarus Group for money laundering purposes. The hack resulted in the loss of about $35 million worth of crypto assets from users of the centralized wallet service since June 2nd.

According to the investigation by Elliptic, a blockchain compliance analysis company, the stolen funds are converted into Bitcoin before being laundered through a platform called “Sinbad.io.” It is worth noting that Sinbad.io was previously used to launder over $100 million in proceeds from Lazarus Group exploits, including funds from the $540 million Axie Infinity hack and the $100 million Horizon Bridge attack.

Elliptic’s findings suggest that Sinbad.io is likely a renamed version of Blender.io, another popular blender commonly used to launder Lazarus Group funds. Interestingly, Blender.io was the first DPRK-affiliated service of its kind to be sanctioned by the U.S. Treasury Department in May of the previous year.

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Atomic Wallet has announced its cooperation with major exchanges and blockchain analytics companies to track down and block the stolen funds

Atomic Wallet had previously confirmed that it was conducting security investigations and tracking money movements after the hack. However, given Elliptic’s discoveries, it seems unlikely that the wallet service provider will be able to prevent the attackers from exchanging the stolen funds.

There have been conflicting claims regarding the impact of the exploit on Atomic Wallet users. While the wallet service stated earlier this week that less than 1% of its monthly active users were affected, the community has disputed these claims. Some users have reported the loss of tokens and deletion of transaction data, while others have expressed frustration at the complete deletion of their entire crypto portfolio.

Atomic Wallet is referred to as a cold wallet, which means that all passwords and data are stored on the user’s device and not on a central server. The goal of this setup is to reduce the risks associated with custody and the potential loss of funds through centralized services. However, the recent exploit highlights the complexity of the security vulnerabilities that can occur even with cold wallet-style storage.

Atomic Wallet has announced its cooperation with major exchanges and blockchain analytics companies to track down and block the stolen funds. However, it did not specify whether law enforcement agencies were involved in the investigation. In addition, no details on compensation plans for affected users have yet been announced by the platform.

As the aftermath of the Atomic Wallet hack unfolds, it highlights the ongoing challenges associated with securing crypto assets and the need for constant vigilance in the face of evolving threats. This incident is a reminder to users and service providers alike to prioritize strong security measures and take proactive efforts to protect digital assets from malicious actors.

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(Featured image by Tumisu via Pixabay)

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First published in COIN KURIER, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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