3,248 ETH Stolen In Axie Infinity Co-Founder Hack – Here Are The Details

On Thursday night, the Axie Infinity co-founder suffered a hack that included a large amount of ETH being withdrawn from the wallet and sent to Tornado Cash. The suspicious activity was revealed by a blockchain investigator, who alerted of the compromised whale wallet over the Ronin bridge.

Related Reading: Massive Crypto Breach: Hackers Extract $26 Million In BTC And ETH From This Exchange

Almost $10 Million In Stolen Funds

Web3 security platform Ancilia was the first to inform of an alleged security breach over the Ronin Bridge. At the time, 2,790 ETH had been withdrawn and deposited to Tornado Cash.

Aleksander Larsen, one of the Co-Founders of Sky Mavis, Axie Infinity, and Ronin Network, clarified that neither the Ronin bridge nor the chain had been compromised.

The Axie Infinity COO suggested that rather than the bridge suffering a security breach, it was a wallet being compromised, and the funds were “tornado cashed.”

As Larsen pointed out, the funds stolen during most exploits are sent to crypto mixers to “mud” their transaction history and become more challenging to track. Although commonly used by hackers, these tools are created and encouraged to be used for user privacy protection.

Tornado Cash has suffered extensive scrutiny from US regulators over the last few years. The mixing service was sanctioned and blacklisted for allegedly failing to “impose effective controls.”

Larsen assured the community that the Ronin bridge counts with “top security” it’s been through several audits. Additionally, it is set to pause when suspiciously large quantities are being withdrawn to prevent large exploits.

Later, blockchain investigator PeckShield replied to the Sky Mavis Co-founder, pointing out that a whale wallet was compromised and that now 3,248 ETH, worth around $9.7 million, had been stolen.

#PeckShieldAlert It appears a whale wallet has been compromised, & ~3,248 $ETH (worth ~$9.7m) from the #Ronin Bridge was withdrawn and transferred to #TornadoCash pic.twitter.com/sRK36BQFDu

— PeckShieldAlert (@PeckShieldAlert) February 23, 2024

The heist consisted of over a dozen transactions and involved three different wallets. As the investigator’s post shows, some funds were moved between the criminal wallets before being deposited to Tornado Cash to complicate its tracking further.

Axie Infinity Co-Founder Personal Addresses Hacked

Some X users were skeptical of Larsen’s post as they pointed out that, despite the bridge not being compromised, the hacked wallet seemed to be in the Ronin Network Team’s control.

Jeff ‘Jihoz’ Zirlin, one of Axie Infinity’s co-founders, announced on X (former Twitter) that the compromised wallets were two of his addresses and, as such, they were not related to the Ronin chain.

The exploit occurred due to “leaked keys,” Zirlin pointed out, unrelated to operations at Axie Infinity’s creator company Sky Mavis. He also explained that the hack did not affect the validation or operations of the Ronin chain.

This has been a tough morning for me. 

Two of my addresses have been compromised.

The attack is limited to my personal accounts, and has nothing to do with validation or operations of the Ronin chain.

Additionally, the leaked keys have nothing to do with Sky Mavis operations.…

— Jihoz.ron (@Jihoz_Axie) February 23, 2024

The Axie Infinity co-founder echoed Larsen’s affirmation about the chain’s security. Zirlin assured that strict security measures are implemented for all chain-related activities. Notably, AXS price didn’t seem to be affected by the exploit news.

In the post, Zirlin took the chance to express his gratitude to those who reached out to him during the difficult time. Promising to “keep pushing forward with every one of you on this magical journey” to bring “economic freedom to all internet users, starting with gamers.”

Hackers have targeted important figures within the blockchain and crypto sphere in the last month. A similar instance occurred on January 31 when Ripple made the headlines. Firstly, it was reported on X that an alleged Ripple hack stole over 213 million XRP worth $112.5 million, which negatively affected the token’s price momentarily.

It was later revealed that the personal addresses of Ripple’s co-founder Chris Larsen saw the unauthorized withdrawal of funds. It’s worth noting that part of the stolen funds was tracked and recovered by the Binance Team briefly afterward.