Drake-Backed Crypto Casino Loses $40M

Crypto funds were drained from a wallet belonging to Stake, the gambling platform, in an apparent hack

Online gambling site Stake, which allows bets to be placed using crypto, appears to have been targeted by an exploit. On-chain analyst Cyvers reported that $16 million has been withdrawn on the Ethereum network following a “private key leak.” Blockchain sleuth ZachXBT backed up Cyvers’ claim, stating that $15.7 million had been drained on Ethereum and another $25.6 million had been lost across Polygon and the Binance Smart Chain.

The gambling firm, which is backed by rapper Drake, experienced multiple unusual transactions Monday morning Eastern Time, losing around $40 million in funds, blockchain security experts said today. According to Etherscan, the transactions occurred between 8:52 am ET and 10:05 am ET. At 10:08 am ET, the site’s official Telegram posted that “[d]eposits & withdrawals on Ethereum & BSC/ERC20 networks are undergoing temporary maintenance.”

Messages to the site’s published press email were returned as undeliverable, and a spokesperson did not return Blockworks request for comment. Last year, more than $3.7 billion worth of crypto was lost to various hacks and exploits, although that figure dropped by 70% in the first quarter of this year.

Stake has been the subject of a trademark infringement lawsuit in Australia and a separate $400 million claim against the founders from a former associate. The stolen funds have been converted to ether (ETH) and transferred to several externally owned wallets, Cyvers said.

“Three hours ago, unauthorized [transactions] were made from Stake’s ETH/BSC hot wallets. We are investigating and will get the wallets up as soon as they’re completely re-secured,” the company tweeted. “User funds are safe,” it added. A “hot wallet” is a digital asset wallet connected to the internet. Such wallets are vulnerable to hacks and other exploits.

MetaMask Lead Product Manager and security expert Taylor Monahan noted on Twitter that the “Stake hackers [are] looking quite methodical,” posting a visual of the wallet transfers from the suspected hackers so far.

The Stake wallet that was targeted still holds $340,000 worth of ETH and $2.1 million in various altcoins, Etherscan data shows. Withdrawals from the wallet appear to have been paused, which is also a claim made by several users on Twitter.

Stake is an Australian casino and sportsbook that allows users to deposit and play with cryptocurrencies. It made $2.6 billion in revenue in 2022, according to a Financial Times report.

Stake is an online crypto casino and gambling platform that offers a variety of games such as dice, poker, roulette, and sports betting. Users can deposit and wager with a range of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and more. Stake is known for its transparent and provably fair gaming system, which allows users to verify the fairness of each game’s outcome. Keep in mind that the cryptocurrency and online gambling industries can be risky, so always exercise caution and responsible gaming practices when using such platforms.