Hackers stole cryptocurrency worth $615 million from a digital ledger used by players of the popular online game Axie Infinity, in a major digital cash heist revealed Tuesday.
About 35 percent of Axie Infinity traffic—and the biggest share of its 2.5 million daily active users—comes from the Philippines, where high proficiency in English, strong gaming culture, and widespread smartphone usage have fueled its popularity, according to Sky Mavis, maker of the battle and trading game.
Users of the popular play-to-earn game will not be able to withdraw their cryptocurrencies from the Ronin Network while the hacking of the system is being investigated, a local official of the gaming company said on Wednesday.
Nix Eniego, Axie Infinity Philippines lead, said the company is working to ensure that no users’ funds are lost.
“We are actively investigating the situation and are in the process of discussing with Axie Infinity/Sky Mavis stakeholders about how to best move forward and ensure no users’ funds are lost. We will continue to provide updates as we learn more,” Eniego said.
He said that around 60 percent of Axie’s user base is in Asia—majority of which is from the Philippines.
Ronin Network said the attack targeting its blockchain netted 173,600 ether and $25.5 million worth of stablecoin, a digital asset pegged to the US dollar.
The haul was valued at $545 million when it was stolen on March 23, but was worth about $615 million based on prices Tuesday, making it one of largest thefts ever in the crypto world.
“Most of the hacked funds are still in the hacker’s wallet,” Ronin said in a post revealing the theft.
The memo on the cyberattack said only Ethereum and USDC assets were compromised. Meanwhile, AXS and SLP, which can be earned in the Axie game, as well as RON assets, were “safe right now.”
Richard Laig, an Axie player, told ABS-CBN that Axie users have no choice but to wait it out and hope for the best.
“Everybody who is playing Axie infinity really doesn’t have a choice because their assets are already in that ecosystem and all that is left now is just to have faith in the promise of Sky Mavis that they will make everybody whole, and that going forward they will improve their security,” Laig said.
Interest in cryptocurrency has boomed, along with its values, but the money has also become an attractive target for tech-savvy thieves.
The team at Sky Mavis discovered the security breach on Tuesday after a user was unable to withdraw ether, according to the company.
Ronin was still investigating the hack but said that hackers got hold of private “keys” to withdraw digital funds.
“We know trust needs to be earned and are using every resource at our disposal to deploy the most sophisticated security measures and processes to prevent future attacks,” Ronin said.
“We are working with law enforcement officials, forensic cryptographers, and our investors to make sure there is no loss of user funds.”
In Axie Infinity, players participate in battles using colorful blob-like Axies and are mainly rewarded “Smooth Love Potion” (SLPs) that can be exchanged for cryptocurrency or cash — or invested back into the game’s virtual world Lunacia.
To play the game, players first have to purchase at least three Axies.
An Axie is an NFT — a unique, non-fungible token, with a particular set of abilities and characteristics. Like NFT pieces of art, they are stored on the blockchain — a digital ledger that cannot be changed.
Axies can be bought, sold, or rented to other players. Owners can also breed them to create new Axies that provide more value.
Laig, who is also a blockchain game developer, meanwhile said that despite the hack, Axie will continue to be popular.
“I think it is here to stay. Axie was actually gearing up for its new update, Origins. Unfortunately, the timing of this will likely have an effect on the launch of that new update. Everyone in the community is
keeping a close watch on what happens from here.”
During the early days of the COVID-19 pandemic, play-to-earn games like Axie exploded in popularity in the Philippines as thousands of Filipinos sought ways to weather the economic crisis caused by the
outbreak. With AFP