In a brazen attack on popular video game Axie Infinity, hackers swiped $625 million in cryptocurrency, the game company’s executives said Tuesday, marking one of the largest crypto-thefts to date amid rising rates of such crime.
“There has been a security breach on the Ronin Network,” the company said in a post in its newsletter. “We are working directly with various government agencies to ensure the criminals get brought to justice.”
Representatives for Sky Mavis did not immediately return request for comment.
Axie Infinity uses a “play-to-earn” system that combines finance and gaming, powered by NFTs, unique tokens that can be traced back to a user. Players buy creature-centric NFTs to gain entry into the game, and then spend more crypto to acquire and breed various beasts they can deploy in battles. The NFTs have both in-universe and real-world value, adding a kind of digital-money buzz to traditional gameplay.
The blockchain is the public record of where cryptocurrency transactions take place, functioning as a financial nerve center.
The Ronin hackers made off with some 174,000 ETH, the currency associated with the Ethereum blockchain, and nearly 26 million in USDC; collectively the two are currently worth abut $625 million. USDC is a stablecoin, which means its value is pegged to the U.S. dollar.
Crypto hacks are becoming more common as the amount of trading activity increases. A hack of the Bitmart platform in December resulted in a theft of nearly $200 million in currency, while last summer a hacker hit Poly Network, which allows blockchains to work together, for a number exceeding $600 million as well, though eventually returned the money.
Activists worry that the anonymity of the blockchain makes thievery easier; while all transactions are recorded there, it is often difficult to know who various addresses belong to.
Trading in Axie Infinity was frozen Tuesday in the wake of the hack, as fans and experts questioned whether the hack might make companies and players more skeptical of play-to-earn games.
Sky Mavis dismissed any concern the hack would disrupt its activities on Tuesday.
“We are here to stay,” the Axie Infinity Twitter account posted shortly after news of the hack broke.
The game has at times generated controversy because of its high cost to play; the company has even launched a “scholarship program” that brings together devoted gamers who lack the money with people who have the funds but lack the skill or time.
Since tokens fluctuate in value, breaches can have an effect on trading. The crypto community on Tuesday was abuzz about the action of “Cobie,” an enigmatic crypto figure (real name: Jordan Fish). He generated an intense back and forth on Twitter when he said he had taken short positions on a large number of NFTs from the game last week because he perceived security flaws.
“I noticed that Axie bridge was exploited for $600m 6 days ago, so I shorted AXS with high leverage,” he wrote in a post, as some they did the same while others lobbed questions at their statements.
It remains to be seen how much of Ronin’s hacked cryptocurrency will make it into general circulation. The conversion into traditional, or fiat, currency is considered one of the major hurdles for would-be crypto thieves, who struggle to obtain real-world dollars without catching the eye of investigators. Such realities over time could deter hackers, as they realize stealing the money is only half of the battle.
Last month, a New York couple was arrested and charged with money laundering after they tried to convert some of the billions from an infamous 2016 hack into real-world currency, helping to lead investigators to them.