Let's see how the latest crypto hack went down and updates on how Ronin Network lost crypto millions.
Axie Infinity’s Ronin Network is the latest crypto hack victim.
On March 29, Ronin Network announced a security breach that happened six days prior. The hack compromised the network’s validators. Ronin said hackers took 173,600 ETH and 25.5 million USDC, which amounts to about $625 million in U.S. dollars.
Ronin has since halted its bridge as well as the associated Katana Dex while the organization, built by the makers of Axie infinity, works with law enforcement and investigators to trace the hacker and recoup the losses.
On March 29, Ronin wrote, “The attacker used hacked private keys in order to forge fake withdrawals. We discovered the attack this morning after a report from a user being unable to withdraw 5k ETH from the bridge.”
Ronin says that all of the Axie Infinity (AXS), Ronin (RON), and Smooth Love Potion (SLP) tokens on the network are currently safe.
How does Ronin act as a bridge to the Ethereum blockchain?
Ronin Network is a side chain that connects the Axie Infinity video game to the Ethereum blockchain. Sidechains are supposed to mitigate risks of hacks. Much like microgrids prevent electrical blackouts, sidechains contain hacks from a larger network.
However, because the Ronin hacker accessed Axie Infinity DAO nodes and Ronin Network nodes, they were able to take off with a whopping $625 million. “The attacker managed to get control over Sky Mavis’s four Ronin Validators and a third-party validator run by Axie DAO,” writes Ronin.
Will Axie Infinity players get their crypto back after the heist?
Ronin Network has closed the loophole for the hacker by revoking previous allowlist access from a dead November 2021 protocol. Still, players and crypto traders are out a staggering amount of money. It’s possible that Ronin and lawmakers will be able to access the wallets used in the transaction, but until then, that’s $625 million lost. Most of the funds are still in the hacker’s wallet, according to Etherscan.
Some decentralized finance (DeFi) platforms that have been hacked in the past have paid some or all of the lost crypto back to users themselves. This has helped strengthen a troubled reputation at times. It isn't clear what Ronin’s plans are beyond the immediate crisis mitigation, but one thing is clear. The $625 million hack is a massive blunder, even more than PolyNetwork’s $600 million hack last year. Fortunately for PolyNetwork, the hacker returned all of the funds in due time. Axie Infinity users may want to hope for a similar fate in the Ronin Network hack.