$600 Million In Ethereum Stolen From NFT Gaming Blockchain

Topline

Hackers allegedly breached gaming-focused blockchain platform Ronin Network last week and extracted cryptocurrencies now valued at more than $600 million, the company announced on Tuesday, marking the second-biggest hack ever in the burgeoning cryptocurrency space.

The attack is the largest since a $600 million hack of blockchain-based platform Poly Network in … [+] August.

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Key Facts

“There has been a security breach,” Ronin, an Ethereum-linked blockchain platform for non-fungible token-based video game Axie Infinity, the company wrote in a blog post on Tuesday, adding that the hack was discovered today but occurred on Wednesday.

According to Ronin, 173,600 ether tokens and 25.5 million USD coins—worth nearly $620 on Tuesday—were drained from its platform after an attacker used hacked private keys to forge two fake withdrawals last week.

The platform discovered the attack after a user reported being unable to withdraw 5,000 ether tokens, worth $17 million, from the network on Tuesday morning.

In an email, Tom Robinson, chief scientist at blockchain analytics firm Elliptic, pointed out the heist was the second-biggest hack ever based on the value of the cryptocurrency at the time of the attack, about $540 million.

Only a $600 million hack of blockchain-based platform Poly Network in August is larger, according to Elliptic; those funds were ultimately retrieved after a slew of crypto exchanges and blockchain firms started tracking identity clues on the blockchain.

In the Tuesday blog post, Ronin said it has reached out to security teams at major exchanges and blockchain analytics firm Chainalysis for help and has temporarily halted transactions on its network “to ensure no further” attack vectors remain open for the hacker to exploit any cybersecurity vulnerabilities.

What To Watch For

How the stolen cryptocurrency moves on the blockchain. According to Ronin, most of the hacked funds are still in the hacker’s wallet.

Key Background

Tuesday’s hack on Ronin marks one of the biggest hacks in cryptocurrency history and is even bigger than the $460 million hack on cryptocurrency exchange Mt. Gox that led to the company’s bankruptcy and heightened regulation in the nascent space about seven years ago. Securities and Exchange Chairman Gary Gensler has repeatedly said cryptocurrencies deserve more government scrutiny, particularly to help protect investors. Last year, he called on Congress to ramp up its authority over the cryptocurrency industry. “Right now, we just don’t have enough investor protection in crypto,” he said. “Frankly, at this time, it’s more like the Wild West.”

Crucial Quote

“As of right now users are unable to withdraw or deposit funds to Ronin Network,” the company said Tuesday. “Sky Mavis is committed to ensuring that all of the drained funds are recovered or reimbursed.”

Big Number

$14 billion. That’s how much money illicit cryptocurrency addresses received last year, climbing 79% from one year prior and marking an all-time high for cryptocurrency-based crime, according to blockchain analytics firm Chainalysis, which cited the explosion in mainstream cryptocurrency adoption as a main catalyst.