Investigators are on the trail of hackers who spirited away more than US$600 million in cryptocurrency last week, watching the money as it moves around a system that critics call the Wild West of finance.
But they are playing catch-up: the gaming company that got scammed apparently did not even notice for six days.
The hack is one of the biggest to hit the crypto world, raising huge questions about security in an industry that only recently burst into the mainstream thanks to celebrity promotions and promises of untold wealth.
Photo: REUTERS
The sector has been beset by scams and hacks.
This week’s theft from the makers of Axie Infinity, a game where players can earn crypto through game play or trading their avatars, came just weeks after thieves made off with around US$320 million in a similar attack.
“We are seeing more hacks because there is more money in blockchain,” said Roman Bieda of Coinfirm, a crypto security company, referring to the technology that underpins cryptocurrencies.
Photo: Bloomberg
The industry should have learned the lessons from previous attacks but security was still being sacrificed for profit, he added, labelling Axie’s failure to notice the hack a “huge deficiency.”
REFUNDS PROMISED
The Axie Infinity attackers exploited weaknesses in the set-up put in place by the Vietnam-based firm behind the game, Sky Mavis.
The company had to solve a problem: the ethereum blockchain, where transactions in the ether cryptocurrency are logged, is relatively slow and expensive to use.
To allow Axie Infinity players to buy and sell at speed, the firm created an in-game currency and a sidechain with a bridge to the main ethereum blockchain.
The result was faster and cheaper — but ultimately less secure.
Hackers were able to take over the sidechain and empty its coffers apparently without anyone realizing, something experts say would be all but impossible on the ethereum blockchain.
The firm said it would recover or reimburse the funds, easing the anxiety of gamers — particularly in the Philippines where hundreds of thousands play Axie Infinity.
“Some of the Philippine community right now are going crazy because of what happened,” said Dominic Lumabi, a gamer from Manila.
Some feared the game would close and money would be lost, he said, adding that he was relieved Sky Mavis was being transparent.
But the firm faces a tough challenge to get the money back.
‘CONSTANT BATTLE’
Security firms are monitoring the stolen money as it moves through various wallets, as accounts are called in the crypto-world.
Blockchain data platform Chainalysis is helping Sky Mavis track the money, and Elliptic said it was investigating and alerting its clients.
Bieda from Coinfirm said that sooner or later the perpetrators would be traced.
“The bigger the amount, the harder it is to hide,” he said.
But even though investigators can see where the money is, there are tricks the thieves can use.
They can employ software that mixes the stolen money with legitimate streams, use exchanges with lax rules, or move their funds to a jurisdiction with no rules at all such as North Korea or Russia.
Any of those moves makes it much easier to transfer the cryptocurrency into everyday, spendable cash.
It is a “constant battle” between the thieves and those trying to stop them, said Bieda.
“Adoption (of cryptocurrency) is growing, more protocols and more solutions are created, but the pursuit of cheap transactions and profit means the industry sometimes... forgets about security.”
The low voter turnout for the referendum on Aug. 23 shows that many Taiwanese are apathetic about nuclear energy, but there are long-term energy stakes involved that the public needs to grasp Taiwan faces an energy trilemma: soaring AI-driven demand, pressure to cut carbon and reliance on fragile fuel imports. But the nuclear referendum on Aug. 23 showed how little this registered with voters, many of whom neither see the long game nor grasp the stakes. Volunteer referendum worker Vivian Chen (陳薇安) put it bluntly: “I’ve seen many people asking what they’re voting for when they arrive to vote. They cast their vote without even doing any research.” Imagine Taiwanese voters invited to a poker table. The bet looked simple — yes or no — yet most never showed. More than two-thirds of those
In the run-up to the referendum on re-opening Pingtung County’s Ma-anshan Nuclear Power Plant last month, the media inundated us with explainers. A favorite factoid of the international media, endlessly recycled, was that Taiwan has no energy reserves for a blockade, thus necessitating re-opening the nuclear plants. As presented by the Chinese-language CommonWealth Magazine, it runs: “According to the US Department of Commerce International Trade Administration, 97.73 percent of Taiwan’s energy is imported, and estimates are that Taiwan has only 11 days of reserves available in the event of a blockade.” This factoid is not an outright lie — that
Cheng Ching-hsiang (鄭青祥) turned a small triangle of concrete jammed between two old shops into a cool little bar called 9dimension. In front of the shop, a steampunk-like structure was welded by himself to serve as a booth where he prepares cocktails. “Yancheng used to be just old people,” he says, “but now young people are coming and creating the New Yancheng.” Around the corner, Yu Hsiu-jao (饒毓琇), opened Tiny Cafe. True to its name, it is the size of a cupboard and serves cold-brewed coffee. “Small shops are so special and have personality,” she says, “people come to Yancheng to find such treasures.” She
Former Chinese Nationalist Party (KMT) chairwoman Hung Hsiu-chu’s (洪秀柱) attendance at the Chinese Communist Party’s (CPP) “Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War” parade in Beijing is infuriating, embarrassing and insulting to nearly everyone in Taiwan, and Taiwan’s friends and allies. She is also ripping off bandages and pouring salt into old wounds. In the process she managed to tie both the KMT and the Democratic Progressive Party (DPP) into uncomfortable knots. The KMT continues to honor their heroic fighters, who defended China against the invading Japanese Empire, which inflicted unimaginable horrors on the
RSS