The story of 'Atlantis' as Plato knew it, came to him from Critias (the younger) through his father, Critias (the elder, also Plato's great grandfather), who got it from his father Dropides who received it directly from Solon, who learned of the story from his time in Egypt, specifically via priests in Sais who supposedly maintained an artifact from this lost civilization.
It's clear that Plato's recanting of the story is embellished, he probably made up a great number or all of details to support his ideas and what he was trying to get across, but it's also possible that there are germs of truth in the story, such an ancient civilization being destroyed that Egyptians were aware of.
It's not a stretch to imagine that Egyptians had knowledge of ancient civilizations, or that secret knowledge was revealed to Greeks, and it's not stretch that civilizations rose and fell all over the Earth. There isn't much to hang your hat on but I think we can charitably assume there was some real basis to the story that Plato based his writing on.
Did ancient Egyptians poses knowledge of the Americas and encounter its population? Or was it a story about a local group of people? Or perhaps it was a general story of a pre-historic civilization and the associated cataclysms that ended it? Who knows, but I don't think you can say with certainty that it existed, or it didn't exist at all.