Atomic Wallet crypto breach, ‘a testament to the risk associated with single point failure system’

Atomic Wallet, a centralized storage and wallet service, was breached over the weekend, with users losing US$35 million worth of Bitcoin, Ether, Tether and other tokens.

The security breach of a popular non-custodial decentralized hot wallet, has resulted in the loss of user assets exceeding US$35 million. The hack targeted a range of user wallets within Atomic Wallet, affecting various cryptocurrencies, including BTC, ETH, DOGE, LTC, and USDT. Notably, Tron-USDT suffered the most significant loss.

Read more: ‘As we approach the mega crypto event (BTC halving) we can expect wild swings in the BTC prices, if we go by historical evidence’

Security audit company Least Authority had warned that funds in Atomic Wallet may have been at risk in in a blog post last year.

Naysayers are reiterating that we aren’t there yet when it comes to DeFi.

Mahin Gupta, Founder of Liminal, a wallet infrastructure and custody solutions platform, says, “The incident with Atomic Wallet is a testament to the risk associated with single point failure system. The breach raises concerns about native vulnerabilities within Atomic Wallet’s hot wallet infrastructure. This highlights the critical need for institutions, even those offering self-custody services, to fortify their wallet infrastructure and security measures. As the saying goes, with great power comes great responsibilities, while the hack serves as a reminder of the importance of implementing sophisticated wallet infrastructure and robust security checks.”

The breach raises concerns about native vulnerabilities within Atomic Wallet’s hot wallet infrastructure

Mahin Gupta, Founder of Liminal

He further added that institutions and users alike should prioritize multi-layered security settings that encompass private key management, decentralized access to wallet operations, and comprehensive wallet architecture.

“As for individual users, we recommend adopting multisig wallets if they have assets under $50k. This provides an additional layer of security by requiring multiple signatures for transactions. However, if users are handling more than $50k worth of digital assets, we strongly encourage them to consider professional custody solutions. These solutions remove the risk of a single point of failure and allow users to set up policies that prevent unauthorized transactions. By doing so, they can significantly reduce the risk of security breaches and asset loss,” he said.

He also outlined Liminal’s strategy for secure transactions, while calling for resilience in the crypto industry.

Read more: Compliance technology & expertise is becoming the answer to the cautious crypto community’s misgivings

“At Liminal, we deal with digital assets day in and day out, so, the security of our customer’s assets are of utmost importance to us. We focus on building backend infrastructures for Web3 Institutions to help them safeguard not just their Hot Wallets but entire wallet operations with compliant and efficient manner. Owing to the increasing incidents, we lay special focus on security and hence, we got CCSS certification along with SOC2 Type II which depicts an industry-standard authorization seal of secure wallet functionality.

“The recent incident with Atomic Wallet serves as a catalyst for the crypto industry to become more resilient and robust. By learning from these events and implementing stronger security measures, we can ensure a safer and more trustworthy ecosystem for all participants.”