A United States federal judge has tossed a class-action lawsuit against Atomic Wallet after the it failed to show the court had jurisdiction over the Estonian crypto firm.

In a Sept. 10 order, Colorado district court judge Philip Brimmer dismissed claims against Atomic Wallet, its CEO Konstantin Gladyshev, shareholder Pavel Sokolov and Evercode Infinite — the software development firm behind Atomic Wallet. 

A group of users who had custodied cryptocurrencies through Atomic Wallet filed the lawsuit in August 2023 after the wallet provider fell victim to a $100 million hack two months earlier. 

Excerpt of Judge Philip A. Brimmer’s order in the class action suit against Atomic Wallet. Source: PACER

Judge Brimmer said the contact between Atomic Wallet and Colorado was insufficient to show the court had jurisdiction over the firm and others named in the suit.

In November, Atomic Wallet filed to dismiss the suit, arguing it had “no US ties” and that only one of the 21 plaintiffs, Graham Dickinson, was based in the state where the suit was filed.

The suit had argued Atomic Wallet’s advertisements were made visible in Colorado on X, that its mobile app could be downloaded in Colorado and that Dickinson “routinely communicated” with Atomic Wallet’s customer service representatives from his home in Colorado.

“The nature of the products at issue here — software applications — makes it even less likely that Atomic Wallet deliberately exploited the Colorado market by making the applications, mnemonic keys, and security updates available to Mr. Dickinson or by sending cash back tokens to him,” Brimmer wrote in his order.

“Unlike tangible goods that must be shipped to customers in a forum state, Atomic Wallet’s products can reach users without Atomic Wallet knowing where those users are located,” the judge added.

Brimmer did, however, offer the plaintiffs an additional 21 days to explain why a suit against defendant Ilia Brusov — one of the founders of Evercode Infinite and an Atomic Wallet shareholder — should not be dismissed.

Like Sokolov, Brusov owns a 12.8% stake in Atomic Wallet, while Gladyshev owns the remaining 74.4%, according to the order.

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