In a recent development, a class-action lawsuit against Atomic Wallet, an Estonian-based cryptocurrency firm, was dismissed by a federal judge in Colorado due to insufficient grounds for jurisdiction. The lawsuit was filed by a group of users who lost funds in a $100 million hack targeting the self-custody wallet provider in June 2023. Despite the dismissal, Atomic Wallet faces ongoing challenges as affected users continue their efforts to recover lost funds and explore additional legal avenues.
Judge Philip Brimmer of the Colorado District Court ruled that the plaintiffs had failed to establish a strong enough connection between Atomic Wallet and the state of Colorado to justify the court’s jurisdiction. The case was brought against Atomic Wallet, its CEO Konstantin Gladyshev, shareholder Pavel Sokolov, and Evercode Infinite, the software development company behind the wallet. The plaintiffs argued that Atomic Wallet’s presence in Colorado was established through the availability of its app for download in the state and advertisements on social media platforms like X (formerly Twitter).
However, Judge Brimmer dismissed these claims, noting that Atomic Wallet’s digital products did not imply deliberate targeting of Colorado residents. He emphasized that software can be accessed globally without the provider’s knowledge of the user’s whereabouts, unlike physical goods that require shipment to a specific location. Atomic Wallet had previously filed a motion to dismiss the lawsuit in November, arguing that it lacked significant connections to the United States and that only one of the 21 plaintiffs resided in Colorado.
The class-action lawsuit was initially triggered by a $100 million hack that compromised around 5,500 wallets in June 2023. Atomic Wallet users who lost funds in the attack sought legal recourse to hold the company and its leadership accountable. The legal battle intensified as the plaintiffs attempted to establish Atomic Wallet’s ties to the state of Colorado, but their efforts fell short in court. Despite the court’s dismissal of most claims, the plaintiffs were granted an additional 21 days to strengthen their arguments against Ilia Brusov, Evercode Infinite’s co-founder and Atomic Wallet shareholder.
While the court’s decision represents a legal victory for Atomic Wallet, the company continues to face reputational and operational challenges following the security breach. Affected users are determined to reclaim their lost funds and are exploring other legal options and avenues for recovery. The court’s dismissal of the lawsuit does not alleviate the broader concerns surrounding the hack or resolve the financial losses experienced by the wallet’s users. Atomic Wallet’s legal defense argued that its operations, primarily conducted digitally, did not intentionally target any specific U.S. state, including Colorado. The plaintiffs view the court’s decision as a setback in their pursuit of justice and compensation, but the opportunity to strengthen their claims against Brusov provides a narrow path forward.
