Axie Infinity

Axie Infinity has become the latest victim of a crypto heist | Source: NFT Evening

Over Half a Billion Dollars Stolen from Crypto Trading Game Axie Infinity

Around A$800 million worth of cryptocurrency was stolen from the pay-to-play online game Axie Infinity in what is being called the biggest decentralised finance (DeFi) heist ever.

The popular NFT-based game developed by Singapore-based Sky Mavis sees users collect and mint axolotl-like cartoon pets. Powered by Ronin Network’s Ethereum-linked blockchain, the game hit a valuation of around US$3 billion, or around A$3.9 billion, late last year.

Sky Mavis confirmed the multi-million dollar hack on March 29, stating that 173,600 Ethereum and 25.5 million USD Coin (USDC), worth a combined total of around US$540 million (A$720 million) at the time of the attack, were stolen through the game’s payment system, Ronin.

The unidentified hackers successfully stole the mass amounts of crypto in two transactions on March 23, however, Ronin only discovered the hack on March 29.

Hackers were able to overload the payment network’s transaction validators and steal the cryptocurrency after using “hacked private keys” or stolen passwords to forge fake withdrawals. The attack was targeted at the Ronin Bridge, which effectively connects different blockchains and allows users to convert tokens.

Sky Mavis has confirmed it will reimburse affected Axie Infinity users, which could be some thousands, potentially millions, of people across the world.

Ronin powers the non-fungible tokens in the game, which has the largest collection of NFTs by all-time sales volume, according to data from CryptoSlam.

Axie Infinity is one of the most popular online crypto trading based games and gained massive popularity initially in the Philippines, where many of its users depend on it as a source of income.

The Axie DeFi heist certainly isn’t the first or the last. According to Elliptic, DeFi users have lost close to A$14 billion to theft and fraud in 2021. Last August, US$600 million was stolen by hackers from the Poly Network, a cross-chain protocol that allows for inter-blockchain messaging, data, and token movements. The stolen cryptocurrency was later returned.

According to Vancouver-based Blockchain Intelligence Group, a small amount of the stolen funds from major exchanges were transferred to cryptocurrency derivatives exchanges FTX, Crypto.com and Huobi. The rest are stored in a digital wallet which is available to view.

In its newsletter, Ronin said that it is “committed to ensuring that all of the drained funds are recovered or reimbursed.” The network reported today that Binance has resumed withdrawals for Axie’s in-game currency, Axie Infinity Shards (AXS) and Smooth Love Potion (SLP). As for the Ronin Bridge, “the exact timeline is still being determined and is dependent on security audits and updates to the bridge.”

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