Court Dismisses Crypto Hack Lawsuit Against Atomic Wallet for Lack of Personal Jurisdiction
On Tuesday, September 10, 2024, the United States District Court for the District of Colorado ruled in the case of Meany v. Atomic Protocol Systems OÜ, determining that the court lacked personal jurisdiction over the defendants. The case involved a group of plaintiffs whose cryptocurrency accounts were allegedly hacked while using the Atomic Wallet platform, leading to significant financial losses.
The plaintiffs, which included Robert Meany, Graham Dickinson, and several others, claimed that their cryptocurrency assets were stolen in June 2023 due to security vulnerabilities in the Atomic Wallet software. The defendants in the case were Atomic Protocol Systems OÜ, doing business as Atomic Wallet, Evercode Infinite, and several individuals associated with these companies, including Konstantin Gladyshev and Pavel Sokolov.
The court’s decision came after the defendants filed motions to dismiss the claims, arguing that the plaintiffs had failed to establish that the defendants had purposefully engaged in activities within the state of Colorado. In its ruling, the court emphasized that merely posting information on the internet or making software available for download does not, in itself, establish personal jurisdiction. The court found that the plaintiffs had not provided sufficient evidence to demonstrate that the defendants had directed their activities toward Colorado or had established minimum contacts with the state.
The court highlighted that only one of the plaintiffs, Graham Dickinson, resided in Colorado and had downloaded the Atomic Wallet application while in the state. Although Dickinson received updates and communicated with customer service representatives from Atomic Wallet, the court ruled that these interactions were insufficient to establish that the defendants had purposefully availed themselves of conducting business in Colorado.
The court also addressed the plaintiffs’ argument that the defendants had exploited the Colorado market. However, it concluded that the evidence presented did not indicate a significant customer base or sales volume in Colorado, further weakening the plaintiffs’ claims of personal jurisdiction. The court noted that the nature of the product—a software application—made it even less likely that the defendants had intentionally targeted the Colorado market.
The ruling stated that the plaintiffs’ injuries, including having their cryptocurrency accounts hacked while located in Colorado, were not enough to establish jurisdiction over the defendants, whose actions occurred outside the state. The court reiterated that personal jurisdiction requires a connection between the defendant’s actions and the state, which was not demonstrated in this case.
Ultimately, the court granted the motions to dismiss filed by Atomic Wallet, Evercode Infinite, Gladyshev, and Sokolov, dismissing the plaintiffs’ claims without prejudice due to a lack of personal jurisdiction.
Please contact BlockTribune for access to a copy of this filing.
