Malaysia’s securities regulator has added Atomic Wallet, a Web3 wallet service, to a list of financial firms prohibited from operating in the country, according to the Malaysian Securities Commission’s website.
Atomic Wallet was flagged for “[o]perating a digital asset exchange (DAX) without registration,” according to the website.
The regulator did not specify further, but Atomic Wallet fell victim to a more than $100 million hack in 2023 and since has been the subject of lawsuits.
It joins several other cryptocurrency-related firms the Commission has barred from operating in the Asian nation, including Crypto Trade Malaysia and Best Exchange.
Atomic Wallet describes itself as a secure, decentralized, and anonymous crypto wallet for staking and swapping upward of 100 digital assets.
Source: Securities Commission Malaysia
Related: Crypto thieves score big on centralized services, private keys in 2024
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.
The losses exceeded $100 million, with some users reporting losing entire crypto portfolios, according to an analysis conducted by Elliptic.
The exploit was reportedly connected to a North Korean hacking outfit, Lazarus Group, which allegedly transferred the stolen funds to Cambodian crypto exchange Huione Pay.
A United States federal judge dismissed the class-action lawsuit later that year, citing a failure to prove the court had jurisdiction over the Estonian crypto firm.
In December of 2023, Atomic Wallet launched a $1-million bug bounty to find security flaws in its wallet software.
Worsening cyber threats
Losses from crypto scams, hacks, and exploits increased by approximately 21% year-over-year in 2024 as hackers zeroed in on centralized exchanges and Web3 wallet private keys as targets.
In a blog post published on Dec. 19, Chainalsysis said $2.2 billion in funds were stolen in 2024 in 303 incidents, up from 282 in 2023.
Chainalysis found that private key compromises accounted for the largest share of stolen crypto in 2024, at 43.8%. Centralized exchanges emerged as the most common targets.
“In 2024, we saw a big shift in crypto attacks, with centralized entities becoming far more prominent targets,” Jean Rausis, cybersecurity expert and co-founder of DeFi ecosystem SmarDex, told Cointelegraph.
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