Saturday, August 13, 2022

‘Axie Infinity’ CEO Moved $3 Million In Crypto Tokens Before Revealing Massive Hack

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On March 23, hackers broke into Axie Infinitys Ronin network to steal Ethereum and USDC stablecoins that were worth more than $600 million at the time. In response to the massive theft, axie Developer Sky Mavis Disabled Token Withdrawal – But Apparently Not Before The CEO Moves $3 Million In Axie’s main token, AXS, in Binance. According to BloombergCompany CEO and co-founder Trung Nguyen made the big transfer just hours before Sky Mavis announced on March 29 that the “play to earn” game had been hacked.

It was YouTube user Asobs who was the first identified the transaction and who has shared their documentation with Bloomberg. The news organization then teamed up with associate professors of mathematics at Winthrop University to confirm its findings. Asobs analyzed the transaction details and connected it to a wallet managed by Nguyen based on past transactions, such as the first distribution of tokens for the game during the early years.

When asked, company spokesperson Kalie Moore confirmed the transaction to: Bloomberg. Moore said Nguyen made the transfer to support the company’s finances and ensure it can provide liquidity to its users. Nguyen apparently had to do this in the down-low so people officially follow axie wallets wouldn’t be able to bring the news to the forefront and cash out before the rest of the players even know what’s going on.

Moor said:

“At the time, we (Sky Mavis) understood that our position and options would be better the more AXS we had on Binance. This would give us the flexibility to pursue different options for securing the loan/capital need. The Founding Team chose to transfer it from this wallet to ensure that short-sellers, who follow official Axie wallets, can’t bring the news to the forefront.”

Nguyen posted a Twitter thread after Bloomberg’s report went up, saying his team had been in touch with Binance after the hack was discovered to “ensure user funds would be recovered as soon as possible”. The executive added: “This discussion included Sky Mavis providing liquidity while we worked on full support for the bridge.” He also called speculation about insider trading “baseless and false.”

In Axie Infinitypeople can earn cryptocurrency by playing the game and completing tasks like winning Arena battles and breeding axie monsters, which are non-replaceable tokens. The attack on his Ronin network is now known as one of the biggest in crypto history. According to previous reports by The block, bad actors gained access to his system by sending a spyware-filled PDF to an employee who thought he was being offered a job with a higher wage from another company. The company turned out not to exist and the offer came from the North Korean hacker group Lazarus, according to the US government.

Sky Mavis has since raised $150 million in funding to help refund users, and Nguyen said all player funds are now supported 1:1. However, the value of Ethereum has dropped significantly since March, so players will not get the money they could have had if they paid out months ago. As for the game itself, it reopened in late June with a new system to flag “big, suspicious shots” and a new land stakes feature that allows players to earn passive income.

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