Hackers stole about US$600 million from a blockchain network connected to the popular Axie Infinity online game in one of the biggest crypto attacks to date.
Computers known as nodes operated by Axie Infinity maker Sky Mavis and the Axie DAO that support a so-called bridge — software that lets people convert tokens into ones that can be used on another network — were attacked, with the hacker draining what is known as the Ronin Bridge of 173,600 ether and 25.5 million USDC tokens in two transactions.
The breach happened on Wednesday last week, but was only discovered on Tuesday, said Ronin, the blockchain that supports Axie Infinity.
Photo: Fred Tanneau, AFP
The attack is the latest to show that bridges are often rife with problems. The computer code of many is not audited, allowing for hackers to exploit vulnerabilities. It is often unclear who runs them and exactly how.
Identities of validators, who are supposed to order transactions on bridges, are often shrouded in mystery. Yet there are thousands of bridges out there, and they move hundreds of millions of dollars worth of cryptocurrency.
“The fact that nobody notices for six days screams aloud that some structure should be in place to watch illicit transfers,” said Wilfred Daye, head of Securitize Capital, the asset management arm of Securitize Inc.
The price of ron, a token used on the Ronin blockchain, dropped about 22 percent after the hack was disclosed.
AXS, a token used in Axie Infinity, fell as much as 11 percent, according to CoinMarketCap.
In its blog, Ronin said it is in touch with major cryptocurrency exchanges and with blockchain tracer Chainalysis to monitor the movements of the stolen funds.
Ronin also said it is working with law enforcement.
The stolen funds went to two cryptocurrency exchanges, blockchain forensics firm Elliptic said.
Several exchanges acknowledged the hack without confirming that the funds had been moved there.
Cryptocurrency exchange operator Huobi (火幣) wrote on Twitter that it would “fully support” Axie Infinity in the aftermath of the attack.
Sam Bankman-Fried, who runs the FTX cryptocurrency exchange, said in an e-mail that it would assist on the blockchain forensics.
Binance Holdings Ltd (幣安) and OKX issued similar statements, with Binance also saying that it is “working with certain law enforcement agents on potential leads,” without giving details.
The Ronin hack follows last month’s attack on the Wormhole Bridge, which resulted in more than US$300 million in losses that one of Wormhole’s sponsors, Jump Crypto, reimbursed.
Other crypto bridges have suffered from so-called rug pulls when their founders disappeared and had issues when their key developers have gone rogue.
“In this case the issue was that the bridge was highly centralized — the theft came as a result of someone hacking the ‘validator nodes’ of the Ronin Bridge,” Elliptic cofounder Tom Robinson said. “Funds can be moved out of the bridge if five of the nine validators approve it. The hacker managed to get hold of the private cryptographic keys belonging to five of the validators — so that was enough to steal the crypto assets.”
Ronin said in the blog post that it would raise the number of validators required for transactions on the bridge to eight out of nine, and “will be expanding the validator set over time, on an expedited timeline.”
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