The latest crypto hack has targeted a gaming-focused blockchain network that supports popular video game Axie Infinity. Hackers have seized around $625 million worth of Ethereum and USDC, two cryptocurrencies, in one of the biggest crypto hacks of all time.
Hackers have hacked into the Ronin Network, an independent, Ethereum-compatible blockchain developed by Sky Mavis, publisher of Axie Infinity. Axie Infinity co-founder Jeff Zirlin discussed hacking onstage during a keynote at the NFT LA conference.
“We realized that the Ronin network had been operating for 173,000 [Ethereum] and about $25 million in USDC,” Zirlin said, below a screen with the words, “State of the Union NFT: where we are today and what’s next. USDC is a so-called stablecoin whose value is pegged to the US dollar.
“This is one of the biggest hacks in history,” he added, while promising to keep building. “We believe in an open, user-owned Internet future.”
Last year, an anonymous hacker stole approximately $600 million in cryptocurrency from Poly Network, a decentralized financial network, in what was known as the biggest crypto heist in history. The pirate returned it later.
John Reed Stark, former head of the Internet Security and Exchanges Commission’s Office of Internet Law Enforcement, told CNN that the latest hack “is a sobering reminder of the vulnerability of Web3 marketplaces to cyberattacks”. (Web3 refers to the idea of a decentralized internet powered by blockchain, the technology that underpins various cryptocurrencies.)
“The entire Web3 market is so strewn with chaos and anarchy that we may never learn the truth about what happened,” Stark said. “And unlike US financial companies who have to report cyberattacks fairly, accurately, quickly, etc., NFT and other Web3 marketplaces have nothing to report at all.”
Axie Infinity is a hit Web3 game where players use digital NFT pets, called Axies, to interact with the game’s community. Players can use their Axies to battle other players and create new Axies. In 2021, the game’s creator raised $152 million in Series B funding led by renowned venture capital fund Andreessen Horowitz.
According to a blog posted At the official Ronin Network substack on Tuesday, the system halted activity on networks that allow players to convert assets in the Axie Infinity universe and convert currencies between the Ethereum and Ronin blockchains. Players holding digital funds on the Ronin Network are currently unable to make transactions.
Beginning March 23, attackers compromised private keys used to validate transactions on the network, according to the company’s blog. These keys allowed malicious actors to falsify fake withdrawals. The activity went unnoticed until a user was unable to withdraw funds and filed a report.
The network pledged to “ensure that no user funds are lost,” according to the blog. Most of the stolen funds currently remain in the hacker’s crypto wallet, the company said.
“We are working with law enforcement officials, forensic cryptographers and our investors to ensure that all funds are recovered or refunded,” the network said. tweeted.
At the NFT LA conference, some attendees who had just learned of the hack were unfazed by the news.
“I don’t think the coin falls too badly,” said Justin Seeley, owner of NFTs and Axie Infinity tokens, referring to Axie Infinity’s Ronin token which dropped 20% on news of the hack.
“Twenty percent…not too bad.” Other projects would be much worse,” added Ben Wright, who also says he is invested in Axie
“We are in crypto; 20% is nothing,” Seeley said.
Other NFT play-to-earn (P2E) games at the conference were surprised to hear the news
“Axie got hacked!” two incredulous workers said to each other at a booth at Polker, a P2E poker game.
“It worries me, but I like it,” said Conor Thacker, chief executive of Polker. “The more exploits that happen now, the less will happen in the future.”