Ronin Network, part of the Ethereum blockchain, was hacked and $615 million in USDC and ether was stolen.
Developers of the Ronin Network discovered the hack during the week of March 29. This occurred when an individual user reported difficulties withdrawing money from the bridge six days after the theft.
The stolen funds amounted to $540 million at the time of the attack. It has increased to $615 million as of Tuesday, making it the second-largest theft seen in the crypto sector.
A side chain of the Ethereum blockchain, the Ronin Network, is used primarily as the payment rails for the popular play-to-earn game, Axie Infinity, offering game players cheaper transaction fees.
According to a blog post from the Ronin network, the theft occurred on March 23. The attackers use hacked private keys to “forge fake withdrawals” through a backdoor route. The hack drained 173,600 ether (ETH) and 25.5M of the stablecoin, USD coin (USDC).
Blockchains use validator nodes to verify, vote, and maintain a record of transactions. Ronin consists of nine different validator nodes. To recognize a withdrawal or deposit, five out of the nine nodes must give a signature of approval.
Per the Ronin Network, attackers gained a signature through a backdoor loophole. This was offered by the play-to-earn game’s decentralized autonomous organization.
“This traces back to November 2021 when [Axie creator] Sky Mavis requested help from the Axie DAO to distribute free transactions due to an immense user load. The Axie DAO allowlisted Sky Mavis to sign various transactions on its behalf. This was discontinued in December 2021, but the allowlist access was not revoked,” the authors of the report wrote.
The Ronin Network said it is working with law enforcement as well as the blockchain forensic firm, and Chainalysis. They have taken the necessary steps to shore up future security breaches that could occur by the same route.
The stolen funds were taken in two transactions. They have been traced back to the hacker’s digital wallet. According to the developer, Kelvin Fitcher, some of the Ethereum has been deposited into accounts on the crypto exchange, FTX.
Fitcher, some of the Ethereum has been deposited into accounts on the crypto exchange, FTX.
Since the Ronin Network announced the theft, its native cryptocurrency, Ronin (RON), has fallen 21% on the day from $2.30 to $1.80 per coin, according to Coinmarketcap.
Last year, attackers stole a total of $3.2 billion in cryptocurrency from investors, according to a report from Chainalysis. Before Ronin, the largest hack of 2022 so far was the $325 million theft through a flaw in Wormhole, a cross-chain bridge that allows users to transfer assets between the Ethereum and Solana blockchains.
Jump Trading, an early developer of the Wormhole bridge project, compensated investors for the stolen funds.
·Senior Reporter for Yahoo Finance