Crypto hackers targeted a blockchain network that supports the popular pay-to-earn game Axie infinity. The hackers got USD 625 million worth of Ethereum and USDC from this digital heist making it the largest crypto hack to date.
The Ronin Network, an independent and Ethereum compatible blockchain, which is developed by Axie Infinity Sky Mavis Infinity co-founder Jeff Zirlin, discussed the breach during the NFT LA conference.
“We realized the Ronin network has been exploited for 173,000 [Ethereum] and around 25 million dollars in USDC. State of the NFT Union: Where we are today and what’s next.” USDC is a so-called stable coin whose value is pegged to the US dollar,” Zirlin during the conference.
“It is one of the bigger hacks in history,” he added then vowed to continue building and said, “We believe in a future of the internet that is open and owned by the users.”
A similar hacking incident happened last year where an anonymous hacker got around USD 600 million in crypto from Poly Network which is a decentralized finance network. Later on, though, the hacker gave back what he/she stole.
Former Chief of Security and Exchange Commission’s Office John Reed Stark told CNN that the recent hack “is a sobering reminder of just how vulnerable Web3 marketplaces are to cyber attacks.” (Web3 refers to the idea of a decentralized internet powered by the blockchain, the technology that underpins various cryptocurrencies.)
“The entire web3 marketplace is so fraught with chaos and lawlessness, we may never learn the truth about what happened. And unlike U.S. financial firms who must report cyber-attacks fairly, accurately, promptly, etc., NFT and other Web3 marketplaces do not have to report anything at all,” added Stark.
Axie Infinity is a web3 game where players collect and use NFT digital pets called “Axies”. These then are used to battle other players and breed new ones. Last year, the game creator raised USD 152 million in Series B funding led by VC fund Andreessen Horowitz.
The system has been halted, according to Ronin Network’s official blog Substack, and is preventing players to convert assets in the Axie-verse to then converting them to Ethereum and Ronin blockchains. So players that have digital funds in their Ronin wallet are currently unable to make any transactions.
Hackers compromised private keys on March 23, as per the company blog post. The keys are used to validate transactions on the network. The stolen keys allowed the hackers to forge fake withdrawals and went unnoticed until a user was unable to withdraw funds and filed a report.
After the incident, the network pledged to “ensure no users’ funds are lost” according to the blog post then added that most of the stolen crypto is still in the hacker’s wallet.
“We are working with law enforcement officials, forensic cryptographers, and our investors to make sure that all funds are recovered or reimbursed,” the network tweeted.