Ronin, the Ethereum (ETH) sidechain, has just announced that it suffered a hack on March 23 to the tune of $550 million at the time of the incident. More than 173,600 ETH and 25.5 million USDC were stolen from Ronin’s bridge, making it the second largest hack in cryptocurrency history behind Poly Network.
Ronin suffered the second largest hack in history
Ronin, an Ethereum (ETH) sidechain dedicated to the Axie Infinity blockchain game (AXS), suffered the loss of 173,600 ETH and 25.5 million USDC through a hack that took place on March 23. This represents $552 million at the time of the theft, making it the second largest hack in the history of cryptocurrencies just behind Poly Network’s $611 million.
Ronin’s technical team only became aware of the hack today after a user reported that they were unable to withdraw 5,000 ETH from Ronin’s bridge.
An official statement has now been released by the Ronin team via their blog, explaining that it is their bridge that appears to have been affected.
There has been a security breach on the Ronin Network.https://t.co/ktAp9w5qpP
– Ronin (@Ronin_Network) March 29, 2022
According to this report, 5 of the validator nodes in the Ronin network were exploited, as well as a third party validator controlled by Axie DAO. These are typically required to validate deposits and withdrawals made on the Ronin network.
According to the Ronin team, the network’s security scheme is structured in such a way that attacks of this type are avoided, in particular by decentralising the network, but the hacker still managed to find a backdoor system via an RPC node on the network.
According to the report, Sky Mavis, the parent company of Axie Infinity, had requested Axie DAO’s help in November 2021 when it was faced with an excessive influx of users, allowing it to sign transactions on its behalf for a set period of time.
The permissions were revoked the following month, but access to the list of authorisations would still be possible afterwards. This is what allowed the hacker to obtain Axie DAO’s signature after gaining access to the Sky Mavis network. This was confirmed by the Ronin team.
Once the necessary nodes were under his control, the hacker was able to drain over 173,600 ETH and 25.5 million USDC.
What steps were taken?
Ronin’s team says that the necessary precautions were then taken to prevent further damage being done. The Ronin bridge has been completely shut down to prevent any further leakage of funds, and the Binance platform has also paused its bridge to the Ronin network. The latter is expected to be reopened once it is assured that all remaining funds are safe.
An additional security measure has also been implemented, as the number of validators required has been increased from 5 to 8 as a result of the hack. Ronin also indicated that it has been in contact with all the security teams of the most important exchanges.
It also indicated that its nodes were currently being migrated to fully detach from its old infrastructure. The Katana DEX has also been put on hold until further notice.
In addition, Ronin said it was working with Chainalysis to monitor the direction of the funds in real time. According to Igor Igamberdiev, research director at TheBlock, the funds were sent to portfolios held on FTX and Crypto.com.
Finally, the article states that the team was already working with various government agencies to ensure that those responsible were brought to justice.
The RON token lost 18.4% of its value in 24 hours, falling from $2.30 to $1.81. Axie Infinity’s AXS dropped $5 in value following the hack announcement, bringing its value to $65 at the time of writing.
