Axie Infinity Co-founder’s Wallet Hacked, Losses Approach $10 Million

[TL; DR]

On 23 February Jeff Zirlin, Axie Infinity co-founder, lost ETH worth around $10 million in a crypto heist.

In 2022 Ronin bridge lost crypto assets worth $622 million through hacking.

Market analysts have encouraged key stakeholders to cooperate to prevent crypto heists.

Keywords: crypto loses, crypto heist, crypto hacks, crypto hackers, crypto wallets, eth losses, hacked wallet, Ronin wallet, crypto investments, save crypto

Introduction

As the prominence of cryptocurrencies increases cyber-criminal activities targeting digital assets are on the rise. In 2023 alone malicious actors stole more than $1 billion, a figure that shows the threat of hacking and other related cyber-criminal activities.

Sadly, bad hat hackers target other personal and institutional digital wallets. The aim of this article is to explore how hackers attacked Jeff Zirlin, a co-founder of Axie Infinity’s two wallets.

Jeff Zirlin Losses $9.7 million worth of Ethereum (ETH) to Hackers

Axie Infinity co-founder, Jeff Zirlin’s, two digital wallets were hacked on 23 February leading to a total loss of 3,248 ETH, valued at approximately $9.5 million at the time of the attack.

On 23 February, PeckShield, a blockchain investigator, ed the public about a whale hacked wallet. The hack increased the amount of stolen digital assets this year.

Source: x.com

Zirlin confirmed the hack and added that the digital assets were sent to Tornado Cash, a crypto mixer. As a crypto mixer, Tornado Cash obscures transactions to increase their anonymity to the public.

Zirlin said on X, “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.”

Zirlin also assured the Ronin users that their digital wallets were safe. “Additionally, the leaked keys have nothing to do with Sky Mavis operations. I want to assure everyone that we have strict security measures in place for all chain related activities,” he added.

Despite the hacking setback Zirlin remains positive and resilient in his dealings with crypto assets. He said, “I will keep pushing forward with each and every one of you on this magical journey. The mission: bring economic freedom to all users of the internet starting with gamers.”

Also, soon after the news of the crypto heist became public, another Ronin co-founder, Aleksander Larsen, assured the users that the bridge has high security and had not been breached.

He clarified on X: “The bridge has no issue and Ronin is not compromised…A wallet has clearly been compromised like what happens on every chain, and the funds are being Tornado cashed. The bridge itself has top security, been through many audits and goes on pause when too much is being withdrawn.”

Zirlin acknowledged that the cause of the exploit was a leak of his private keys rather than a compromise of the Ronin protocol. As pointed earlier on, PackShield also confirmed that the ETH losses were a result of a wallet compromise.

Read also: What Are Blockchain Bridges and How Do They Work?

The Ronin Users Still Have the Memories of the 2022 Hack

Following the recent Ronin wallet hack the network users were worried considering that the bridge was also exploited in 2022 leading to crypto losses of more than $622 million.

Analysts blamed that hack on the North Korea affiliated Lazarus Group who took advantage of the protocol’s vulnerability. Also, they have called upon the protocols to heighten their security to save crypto.

The gaming platform was able to recover only $30 million worth of cryptocurrencies. However, it managed to refund all the crypto assets stolen from its users. 2024 has not been immune from crypto heists.

Several crypto hackings have already occurred during this year. For example, the year-to-year amount of stolen crypto assets for January and February, compared to 2023, increased by 713% and 710% respectively.

As a result, Philip Hoey, the Director of CoinJournal, lambasted the rise in crypto losses in the first two months of the year. As per Alexablockchain publication, Hoey said, “The data spells a troubling trend for the cryptocurrency industry. This not only highlights the need for heightened security measures but also calls for international collaboration to combat this issue.”

He continued, “As we witness the evolution of digital finance, it’s imperative that we also evolve our strategies to protect it. This includes enhancing security measures, promoting user education, and fostering international cooperation to deter and respond to crypto crimes more effectively.”

As incidences of crypto hacks increase there is a need to introduce proactive measures to save crypto investments if the market aims to raise the adoption rates of cryptocurrencies. However, this requires concerted effort from various stakeholders such as regulators, law enforcement agents and the crypto industry.

Conclusion

Hackers exploited Jeff Zirlin’s, two crypto wallets and stole 3,248 ETH, worth around $9.5 million. The Axie Infinity co-founder blames the crypto exploit on leaked private keys.

The Axie Infinity founders assured the users that the Ronin Bridge is safe since it has high security measures and is constantly audited. In the meantime, analysts have urged key stakeholders to coordinate their efforts and resources to prevent the rise in crypto cyber-thefts.

FAQs about Crypto Hacking

Will crypto hacks raise in 2024?

Based on previous trends the number of crypto hackings are likely to decrease in 2024. This is because the number of crypto hacks decreased in 2023 as compared to 2021 and 2022. The highest number of crypto heists occurred in 2022.

The biggest crypto heist in 2023?

The hack of Mixin Network that occurred in September, where attackers stole around $200 million, was probably the biggest crypto heist in 2023. The other attacks involved Multichain which lost about $126 million, Poloniex ($126 million) Atomic Wallet ($100 million), Heco Chain ($87 million), Curve Finance ($62 million) and CoinEx ($55 million).
Read also: The Biggest Crypto Heist in History

Where to keep crypto safely?

The best place to keep cryptocurrency safely are hard wallets and secure crypto exchanges. Gate.io is one of the crypto exchanges that has high security where people can store their cryptocurrencies.