Hackers stole $625 million in cryptocurrencies in a daring attack on popular video game Axie Infinity, the game company’s management revealed Tuesday, marking one of the greatest crypto-thefts to date amid escalating incidence of such crime.
According to the firm, the heist occurred last Wednesday when hackers entered a portion of Ronin, the underlying blockchain that supports the game. Sky Mavis developers, who manage both Axie Infinity and Ronin, say they first found the problem on Tuesday.
“There has been a security compromise on the Ronin Network,” the business wrote in a newsletter article. “We are collaborating with several government entities to ensure that the offenders are brought to justice.”
Sky Mavis representatives did not immediately respond to a request for comment.
Axie Infinity employs a “play-to-earn” system that blends financial and gaming and is powered by NFTs, which are one-of-a-kind tokens that can be tracked back to a user. Players purchase creature-centric NFTs to get access to the game, then spend additional cryptocurrency to acquire and nurture various monsters that they may use in battle. The NFTs have both in-universe and real-world worth, giving conventional games a digital-money excitement.
The blockchain serves as a financial nerve centre by keeping a public record of where bitcoin transactions take place.
The Ronin hackers got off with around 174,000 ETH, the money linked with the Ethereum blockchain, and roughly 26 million USDC; the two are presently valued at over $625 million. USDC is a stablecoin, which means its value is fixed in relation to the US dollar.
Crypto hacking is getting more widespread as the volume of trade activity grows. A hack of the Bitmart platform in December resulted in the theft of about $200 million in cash, while last summer a hacker struck Poly Network, which allows blockchains to collaborate, for a total of more than $600 million, but the money was later returned.
Activists are concerned that the blockchain’s anonymity facilitates larceny; while all transactions are logged there, it is sometimes impossible to determine who certain addresses belong to.
Trading in Axie Infinity was halted on Tuesday as a result of the breach, as fans and experts questioned if the attack would make firms and players more wary of play-to-earn games.
Sky Mavis downplayed any fears that the attack will impede its operations on Tuesday.
“We are here to stay,” the Axie Infinity Twitter account said immediately after the breach was revealed.
The game has sparked debate due to its expensive cost to play; the firm has even developed a “scholarship scheme” that pairs passionate players who lack cash with others who have the bucks but lack the ability or time.
Because the value of tokens fluctuates, breaches can have an impact on trade. On Tuesday, the crypto community was buzzing over the actions of “Cobie,” a mysterious crypto character (real name: Jordan Fish). When he revealed last week that he had taken short positions on a big number of NFTs in the game due to suspected security weaknesses, he sparked a heated back and forth on Twitter.
“I discovered that the Axie bridge was abused for $600 million 6 days ago, therefore I shorted AXS with heavy leverage,” he stated in a post, as others did the same and others questioned their allegations.
It’s unclear how much of Ronin’s hijacked cryptocurrency will find its way into wider circulation. Conversion into traditional, or fiat, cash is regarded as one of the most difficult obstacles for would-be crypto criminals, who struggle to get real-world dollars without drawing the attention of authorities. Such facts may prevent hackers in the long run, as they recognize that stealing money is just half the struggle.
Last month, a New York couple was detained and charged with money laundering after attempting to convert part of the billions of dollars from a historic 2016 breach into real-world cash, which helped authorities track them down.
To read our blog on “In the year 2021, cryptominers were the most frequent malware threat,” click here.