“There has been a security breach on the Ronin network,” the company said in a post in its newsletter. “We are working directly with various government agencies to ensure the criminals are brought to justice.”
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Sky Mavis representatives did not immediately respond to requests for comment.
Axie Infinity uses a “play-to-earn” system that combines finance and games, powered by NFTs, unique tokens that can be traced back to a user. Players buy creature-focused NFTs to gain access to the game, then spend more crypto to acquire and breed various beasts to use in battles. The NFTs have value both in universe and in the real world, bringing a kind of digital money to traditional gameplay.
The blockchain is the public record of where cryptocurrency transactions take place and acts as the financial nerve center.
The Ronin hackers made off with around 174,000 ETH, the currency linked to the Ethereum blockchain, and almost 26 million USDC; together, the two are currently worth around $625 million. USDC is a stablecoin, meaning its value is pegged to the US dollar.
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Crypto hacks are becoming more common as trading activity increases. A hack of the Bitmart platform in December resulted in the theft of nearly $200 million in currency, while a hacker last summer hit Poly Network, which enables blockchains to work together, also for a figure in excess of $600 million , but eventually returned the money.
Activists fear blockchain’s anonymity makes it easier to steal; While all transactions are recorded there, it is often difficult to know who owns different addresses.
Trading on Axie Infinity was frozen Tuesday after the hack fans and experts asked if the hack could make companies and players more skeptical about play-to-earn games.
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Sky Mavis dismissed any concerns that the hack would disrupt its Tuesday activities.
“We’re here to stay,” according to the Axie Infinity Twitter account Posted shortly after news of the hack broke.
The game has sometimes caused controversy because of its high cost of play. The company even created a “scholarship program” that matches dedicated players who lack the money with people who have the money but don’t have the skills or time.
As tokens fluctuate in value, breaches can impact trading. The crypto community was thrilled Tuesday by the action of “Cobie,” an enigmatic crypto figure (real name: Jordan Fish). He caused an intense back and forth on Twitter when he said he took short positions on a large number of NFTs from the game last week because of perceived security flaws.
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“I noticed that Axie Bridge was mined for $600M 6 days ago so I shorted AXS with high leverage,” he wrote in a post, as some did the same while others questioned their statements.
It remains to be seen how much of Ronin’s minced cryptocurrency will make it into general circulation. Converting to traditional or fiat currency is considered one of the biggest hurdles for would-be crypto thieves who struggle to get real dollars without catching the attention of investigators. Such realities over time could deter hackers as they realize that stealing the money is only half the battle.
Last month, a New York couple were arrested and charged with money laundering after they tried to convert some of the billions from an infamous 2016 hack into real-world currency and helped lead investigators to them.