The largest cryptocurrency piracy.. $615 million was stolen from the "Ronin Network"

The largest cryptocurrency piracy.. $615 million was stolen from the "Ronin Network"

Thousands, if not millions, of people may have lost their money in the second largest cryptocurrency hack in history.

$615 million has been stolen from Ronin Network, the main platform that powers the popular game Axis Infinity.

One of those affected is Dan Ren, a 20-year-old from Wiltshire. He told the BBC: "I lost 0.15 Ethereum, which is about $500. It's bad, but I have friends who are worse off."

"I lost about $10,000," said Jack Kenny, one of those friends.

"I don't think people fully understand the significance of this hack, $600 million is a huge part of all the assets in this network," added the 23-year-old from Ireland.

Another man from the US East Coast says he lost $8000, but added that there are people who may have lost their “savings” after saving crypto from playing Axi Infinity.

In the game, players fight animated pets called "Axes" in order to earn cryptocurrency.

The game is very popular with millions of players around the world, especially in the Philippines, who are hoping to win cryptocurrency and collect NFT tokens.

Ronin Network, also owned by Vietnamese parent company Sky Mavis, allows players to exchange the cryptocurrencies they earn at Axis Infinity against other cryptocurrencies such as Ethereum.

The hackers reportedly transferred $540 million worth of cryptocurrency to themselves six days ago, but the company only noticed this on Tuesday when a customer was unable to withdraw his funds.

The value of the stolen coins increased as the value of the cryptocurrency increased to about $615 million.

This is the latest in a series of mass cryptocurrency thefts over the past year that totaled more than $2 billion.

The sequence of events related to the hacking operation tells us a lot about the dangers of cryptocurrency and decentralized finance.

Will customers get their money back?

The Ronen Network says it is "working with law enforcement officials and some investors to ensure that all funds are recovered or compensated."

At first, the network posted a statement on its newsletter, then closed its website, and suspended comments on the company's social media posts.

The company later responded to BBC requests for comment, saying it was "committed" to compensating customers but would not provide guarantees.

"I didn't try to contact customer service because I knew it would be pointless," Dan says.

Dan explains sympathetically, “I can't wait to hear from them if and when the bug will be fixed, and I hope to be able to get my Ethereum money back.

The Ronin Network has yet to tell customers what happened to their money or when they will get it back.

In most cases of mass cryptocurrency hacking, customers are compensated in some way, but the process can take several months or years.

Crypto writer David Kanellis from Brutus says direct communication with crypto companies is very poor.

“When you’re dealing with entities that deal with more than half a billion dollars, you would expect there to be more than one way, and an openness to communicate, especially when there is such a fall in security around the hacking process,” David said.

"But again, one of the core principles of the ecosystem is that anyone can start their own business, and there should be no barriers to that."

How did this happen?

Ronen says the hacking process began in November 2021, when the user base of the game "Axi Infinity" swelled to an unsustainable size, and the company said the influx of players caused a "significant user load", forcing the company to do so. It eases its security measures to accommodate the demand. growing.

She says things calmed down in December, but she forgot to re-tighten her security, so hackers exploited that loophole that remained open.

“This is quite typical of crypto companies,” says economist and author Frances Coppola.

"We've seen a lot of hacking and exploitation cause, let's be frank, out of utter negligence and a lack of concern for the safety of people's money," he says.

He concludes, “Cryptocurrency companies are sometimes so eager to make a lot of money, or simply absorb high demand, that they put in poorly designed and tested code, undermine security, or rely heavily on infrastructure.”

The five biggest cryptocurrency hacks

The following numbers are from crypto-analytics firm Elliptic, based on the value of the dollar at the time of the hack:

• $325 Million - Wormhall, February 2022
• $470 million - MT Jukes, February 2014
• $532 million - Quinchik, January 2018
• $540 million - Ronin Bridge, March 2022
• $611 million - PolyNetwork, August 2021

Why does this happen constantly?

Experts say that hackers view cryptocurrencies as an accessible fruit.

Elliptic's Tom Robinson says crypto companies are "big honey jars for hackers".

“Cryptocurrency transactions are not reversible, so if a hacker gets their hands on it, it is very difficult for anyone to get them back,” Robinson adds.

Robinson also says it's easy and tempting, because it's possible to get paid without the added hassle of virtual crimes like ransomware, as criminals have to negotiate with hacked companies.

It is still unknown who is behind the latest hack, but it is not necessary for the supposed criminals to carry out the operation to make money for themselves.

According to crypto researchers at Chainalysis, North Korean hackers stole nearly $400 million in digital assets in at least seven attacks on cryptocurrency platforms last year.