The cryptocurrency community has expressed its concern over the 625-million-dollar breach on Ronin Network, a blockchain project operated by Sky Mavis. It was detected when a user reported that he could not withdraw 5,000 Ethereum from Ronin.
Ronin Network then immediately posted an announcement on its formal Twitter account: “A security vulnerable on Ronin Network has been illegally exploited. The total stolen assets include 173,600 Ethereum and US$25.5 million, withdrawn from Ronin via two transactions”.
To deposit or withdraw money on Ronin Network, users need to be successful in 5 out of 9 authentications. Tracking has shown that the culprit used 4 hacked private security keys plus an authentication procedure controlled by a third party – Axie DAO – to withdraw money.
Ronin Network reported that most of the stolen money is still in the hacker’s e-wallet, while a certain amount has been transferred to the FTX transaction floor. Ronin Network is working with security teams of cryptocurrency transaction floors to track these sums.
Before this incident, each Ethereum was worth $3,420USD, so the total money loss is around $625 million, making this cyber-attack one of the most serious ever in the cryptocurrency history. Due to this incident, the value of Sky Mavis’ cryptocurrency dropped significantly by 22 percent in a few minutes.
Vo Khanh Duong, a cyber-security expert from Athena Co., shared that this hack clearly displays serious system problems of Ronin Network, and that the tracking of the criminal is not a too challenging task. Sky Mavis needs to carefully investigate the case and announce the results to game players and investors for the sake of transparency and avoidance of unnecessary reactions.
The game Axie Infinity by Sky Mavis, making use of Non-fungible token (NFT) technology, broke a record in September 2021 when the company’s total market capitalization reached $2.4 billion, and $8.4 billion a month later.
At present, Sky Mavis has 90 employees, 60 of whom are working in its Vietnamese office. However, the company registration is not in Vietnam. The hack on Ronin Network gravely affects Sky Mavis, and is a warning to blockchain game developers as well as players.
