Hackers managed to steal about $612 million worth of assets from a cryptocurrency exchange network for Axie Infinity, one of the most popular online video games.
The incident, the second-largest known theft of cryptocurrency assets, took place on March 23 but was announced Tuesday by Ronin, a blockchain service managed by the owners of Axie Infinity.
“We are working directly with various government agencies to ensure the criminals get brought to justice,” Ronin said in a blog post. “We are in the process of discussing with Axie Infinity/Sky Mavis stakeholders about how to best move forward and ensure no users’ funds are lost.”
Ronin discovered the hack when a user was unable to withdraw 5,000 ethers from the blockchain-based game. The company halted its exchange network as it scrambled to collaborate with forensic cryptographers and law enforcement “to make sure all funds are recovered or reimbursed,” per the blog post.
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Hackers managed to compromise the validator nodes, which are used to approve transactions, and send 173,600 ethers, or roughly $586 million, to an anonymous ethereum wallet. Additionally, the hackers managed to “drain” $25.5 million of USD coins from the system, a currency pegged to the U.S. dollar, which the hackers achieved by using “hacked private keys in order to forge fake withdrawals,” according to Ronin.
“Our internal network is currently going through a deep forensics review to ensure there is no lingering threat. This was a social engineering attack combined with a human error from December 2021,” Aleksander Leonard Larsen, chief operating officer of Sky Mavis, tweeted. “We are continuing conversations with our stakeholders to determine the best course of action.”
The Ronin hack is the second-largest known cryptocurrency theft in terms of the value of the assets at the time of the theft, according to NBC. The stolen Ronin assets were worth about $540 million when the hack took place last week.
The heist is eclipsed by an incident last August, when a hacker managed to swindle cryptocurrency from blockchain company PolyNetwork worth about $600 million at the time of the hack, per the outlet.
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Operated by Vietnam-based Sky Mavis, Axie Infinity is one of the largest play-to-earn games in the world, with roughly 2 million daily users. The game was launched in 2018 and involves users collecting mythical creatures for battle against other users. Players are rewarded with tokens throughout the game but can also pay for more creatures through cryptocurrency.
Theft has been on the rise in the cryptocurrency sphere as the industry continues to thrive — prompting law enforcement to step up its game. Last month, the Justice Department appointed a prosecutor to head its newly formed National Cryptocurrency Enforcement Team. The FBI also announced it was creating a new “virtual asset exploitation” unit to work on cases involving blockchain and cryptocurrency.
