The Malaysian Securities Commission has added Atomic Wallet, a Web3 wallet service, to its list of financial firms prohibited from operating in the country. This move comes after the regulator found that Atomic Wallet was "operating a digital asset exchange (DAX) without registration," according to the commission’s website.
Background on Atomic Wallet
Atomic Wallet is described as a secure, decentralized, and anonymous crypto wallet for staking and swapping upwards of 100 digital assets. The platform has been in the news previously due to a hacking incident in 2023, where more than $100 million was stolen from users. This led to several lawsuits being filed against Atomic Wallet.
Hacking Incident
The hacking incident in question occurred in 2023 and involved a group of users suing Atomic Wallet in the United States. The losses exceeded $100 million, with some users reporting losing their entire crypto portfolios. An analysis conducted by Elliptic found that the exploit was connected to a North Korean hacking outfit called Lazarus Group.
Lazarus Group’s Role
The Lazarus Group is allegedly responsible for transferring the stolen funds to Cambodian crypto exchange Huione Pay. This incident highlights the growing threat of cyber attacks in the crypto space and the importance of robust security measures.
Cybersecurity Threats on the Rise
Losses from crypto scams, hacks, and exploits have increased by approximately 21% year-over-year in 2024 as hackers zeroed in on centralized exchanges and Web3 wallet private keys. Chainalysis reported that $2.2 billion in funds was stolen in 2024 in 303 incidents, up from 282 in 2023.
Centralized Exchanges and Private Keys
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. Cybersecurity specialist Jean Rausis noted that there was a "big shift" in crypto attacks, with centralized entities becoming far more prominent targets.
Impact on Crypto Industry
The ban on Atomic Wallet and other cryptocurrency-related firms highlights the growing regulatory scrutiny faced by the industry. As cybersecurity threats continue to rise, it is essential for companies to prioritize robust security measures to protect their users’ funds.
Regulatory Environment
Malaysia’s Securities Commission has taken a firm stance against unregistered digital asset exchanges. The commission has prohibited several cryptocurrency-related firms from operating in the country, including Crypto Trade Malaysia and Best Exchange. This move demonstrates the regulator’s commitment to protecting investors and maintaining market integrity.
Conclusion
The ban on Atomic Wallet is a significant development in the regulatory landscape of the crypto industry. As cybersecurity threats continue to rise, it is essential for companies to prioritize robust security measures to protect their users’ funds. The regulatory environment will likely remain under scrutiny as governments and regulators seek to maintain market integrity and protect investors.
Related Articles
- Crypto thieves score big on centralized services, private keys in 2024: A recent report highlights the growing threat of cyber attacks in the crypto space.
- Hacking incident: The hacking incident that occurred in 2023 has led to several lawsuits being filed against Atomic Wallet.
- Losses from crypto scams, hacks, and exploits increased by approximately 21% year-over-year in 2024: Chainalysis reported a significant increase in losses due to crypto-related cyber attacks.
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References
- Securities Commission Malaysia
- Chainalysis
- Elliptic
