Federal Judge Dismisses $100 Million Lawsuit Against Atomic Wallet, Citing Lack of U.S. Jurisdiction

• A U.S. federal judge dismissed a class-action lawsuit against Atomic Wallet due to insufficient ties to Colorado for jurisdiction.
• Atomic Wallet faced a lawsuit following a $100M hack in mid-2023, but the court found no grounds to proceed against the firm in Colorado.
• The plaintiffs were given 21 days to revise claims against Ilia Brusov, an Atomic Wallet shareholder, while the suit against others was dismissed.

District court judge Philip Brimmer has dismissed a lawsuit against Atomic Wallet. The judge ruled that the case against Atomic wallet lacks insufficient jurisdiction. The lawsuit, filed in Colorado, targeted the wallet company and its executives after a $100 million hack affected customers in mid-2023.

Court Finds No U.S. Ties to Atomic Wallet

On September 10, U.S. District Court Judge Philip Brimmer ruled that Colorado lacked jurisdiction over the Wallet, its CEO Konstantin Gladyshev, and shareholder Pavel Sokolov. Evercode Infinite, the software development firm behind the crypto wallet, was also named in the suit. 

The plaintiffs, a group of cryptocurrency users, argued that the wallet’s advertising in Colorado and customer service interactions were sufficient to establish jurisdiction. However, Judge Brimmer disagreed, stating the connection between the company and the state was insufficient.

Wallet Users Affected by Hack Fail to Prove Jurisdiction

The lawsuit began after a hack in June 2023. It led to the theft of cryptocurrencies from Atomic Wallet users. Despite the large financial losses, Judge Brimmer ruled that software applications are not limited by location. 

He explained that the Wallet’s products can reach users without knowing where they are. This weakened the plaintiffs’ case further. Unlike physical goods, software does not need to be shipped to a specific location.

Judge Offers Plaintiffs Opportunity to Amend Case

While the judge dismissed most of the claims, the plaintiffs were given an additional 21 days to clarify why a suit against Ilia Brusov, an Atomic Wallet shareholder and one of the founders of Evercode Infinite , should not be dismissed. Brusov, who owns a 12.8% stake in the Wallet, remains a subject of the ongoing legal scrutiny.

The situation underscores the challenges of taking legal steps against online companies that operate across unclear jurisdictional borders. The plaintiffs must act quickly to modify their case against Brusov, as most of the lawsuit against Atomic Wallet has been dismissed by the court.