Atlantis was founded about 100,000 BC when a fragment from a passing comet fell to Earth on the landmass that would be called Atlantis. Possessing magical qualities that granted great power and extended the life of the people, it would become a great power-source and deity, the Heart of Atlantis. However, Atlantis would eventually abuse it's power and try to use the crystal as a weapon to fuel war, but this would be their downfall and as the crystal protected the capital city, it would carve out a cavern system below the earth for the city to rest in. Several thousand years later, a shepherd named Aziz would find an old cavern system leading into Atlantis, chronicling his two year journey into a series of scrolls that would eventually become the Shepherd's Journal. The journal would be passed around the world as numerous people tried to interpret it and it would eventually pass into the possession of Whitmore Industries when they found it in Iceland.
The spongebob version
In the Spongebob version of the series, Scroopfan altered the story from the origenal. formerly, the King of Atlantis was once a greedy, war-monger king who desired the crystal's power for war. Instead, he made up a new version where the King remained a good guy, and that it was all Dark Cynder's fault that the city sank, instead of the Great Kings of the Past, since apparently, it's so it would fit the main flow of the Story, and to fit the idea that the path for redemption is a great challenge, and in Cynder's case to return to the destroyed city, but then, after the events of Spongebob and friends find atlantis, and Spongebob and Friends meet the great mouse dectecive, return the city to the serfice. the history was also altered, with the desruction taking place before Simba was born but sometime after the corruption of Cynder, to fit the comsect that the worlds have their own timelines but equiled by the united universes.