Mahin Gupta
The recent security breach of Atomic Wallet, a popular non-custodial decentralized hot wallet, has resulted in the loss of user assets exceeding $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.
The latest 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.
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, adopting multisig wallets is recommended 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, professional custody solutions are recommended. 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.
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.
The writer is founder of Liminal, a wallet infrastructure and custody solutions platform
Also published on Medium.
