Sky Mavis COO Promises to Reimburse Players After Hackers Steal $625 Million

The attacker found a backdoor in a Ronin node then used hacked private keys to begin withdrawals.

By Shomik Sen Bhattacharjee | Updated: 31 March 2022 19:13 IST

Sky Mavis COO Promises to Reimburse Players After Hackers Steal $625 Million

Photo Credit: Twitter/ Axie Infinity

Axie Infinity co-founder has stated that new validators will be added to the Ronin network

Highlights

Aleksander Leonard Larson is the co-founder of Axie Infinity
Axie Infinity is one of the biggest play-to-earn games around
The value of Axie Infinity Shards (AXS) has tanked since the hack

Sky Mavis, the company behind the popular play-to-earn game Axie Infinity, has pledged to reimburse players after hackers stole $625 million (roughly Rs. 4,730 crore) from the underlying Ronin Ethereum sidechain. Aleksander Leonard Larson, co-founder and chief operating officer of Sky Mavis, has since tweeted that the crypto company is committed to ensuring all of the drained funds are recovered or reimbursed. Hackers reportedly stole around 173,600 Ether and $25.5 million in USDC on March 23. According to blockchain analytics firm Elliptic, this is the second-largest cryptocurrency hacker theft on record.

"We are fully committed to reimbursing our players as soon as possible," Aleksander Larsen, chief operating officer of Sky Mavis, told Bloomberg. "We're still working on a solution, that is an ongoing discussion."

"The easiest way to look at this is like the bridge is the bank for the Ronin Network," Larsen said. "The heist that happened took out all the ETH and USDC. So, the ETH/USDC on Ronin Network is not currently backed by anything. But we are looking at other options."

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The Ronin Network published a blog on Tuesday explaining that a hacker compromised its network, exploiting the company for 173,600 Ether and 25.5 million USDC stablecoins.

2/4

This was a social engineering attack combined with a human error from December 2021. @SkyMavisHQ tech is solid and we will be adding several new validators to @Ronin_Network shortly to further decentralize the network.
— Psycheout - Aleksander | Axie Infinity (@Psycheout86) March 30, 2022

"We are working with law enforcement officials, forensic cryptographers, and our investors to make sure all funds are recovered or reimbursed," Ronin Network wrote. "The attacker used hacked private keys in order to forge fake withdrawals."

4/4

Very proud of how my teammates have handled the situation so far.

Focusing on what we can solve and dealing with the problems one at a time.

Also a very grateful for all the positive vibes in the @AxieInfinity community.

We rise to the occasion together

More to follow
— Psycheout - Aleksander | Axie Infinity (@Psycheout86) March 30, 2022

Larson called the hack “a social engineering attack combined with a human error” in a Wednesday tweet, adding that Ronin plans to add additional validators to boost decentralisation.

“Sky Mavis has also retained Chainalysis to ensure that any of the stolen ETH moved from this Ethereum address will be tracked,” he said. “It doesn't seem like the hacker will have much luck cashing out.”

Funds stolen in the crypto hack include "deposits of players and speculators and the Axie Infinity Treasury revenue," Larsen added. The attack happened on March 23, but the company only discovered it Tuesday.

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