Cryptos worth $625 million stolen from Axie Infinity's Ronin blockchain

In one of the biggest crypto hacks of the year, hackers stole cryptos worth $625 million from Ronin Network, a sidechain of the Ethereum network, used for transactions on the play-to-earn blockchain game Axie Infinity. 

A sidechain is an independent blockchain that runs in parallel to the Ethereum main net and has its own consensus protocol. It allows tokens and cryptos from one blockchain to be securely used in another blockchain using a two-way bridge. Ronin Network was created by Sky Mavis, the publisher of Axie Infinity after users complained about the high gas fees for transactions on Ethereum. 

The breach was confirmed by Ronin Network in a blog post. “There has been a security breach at Ronin Network. On March 23, Ronin’s four validator nodes and one of Axie’s DAO validator nodes were compromised and 172,600 Ethereum (ETH) and 25.5 million USDC were stolen over two transactions,” the blog said. The Ronin chain includes nine validator nodes. To recognise a transaction signature of five of these validator nodes is required.  

The hacker had used stolen private keys to make fake withdrawals. The breach was detected after six days when a user was unable to withdraw his ETH tokens from the bridge.  

Also read: Sleeping Bitcoins worth $3.65 million moved for the first time since 2011

On its part, Ronin Network said it has temporarily halted the Ronin bridge, which means users cannot deposit or withdraw funds right now. The validator threshold has also been increased from five to eight to prevent another immediate breach from the same hackers. The network has also started the process of migrating the nodes.  

The stolen funds are still in the hacker’s wallet and have not been moved. Ronin Network said it is in touch with Chainalysis to trace the stolen tokens and has also alerted law enforcement agencies about the breach.    

Attacks on blockchain and crypto networks have increased. Early this month, token migration network Wormhole was also breached and wETH (wrapped Ethereum) tokens worth $321 million were stolen. The growing value of cryptos particularly Bitcoin and Ethereum is attracting a lot of unwanted attention from hackers as it is easier to move or launder stolen cryptos. Though records of most crypto wallets are traceable, there is no system to identify the actual owner of the wallet, which is being exploited by hackers and cybercriminals.