"Huge Deficiency": Cryptocurrency Industry Reels From $600 Million Hack

ndtv.com:

The crypto sector has been beset by scams and hacks.

Investigators are on the trail of hackers who spirited away more than $600 million in cryptocurrency last week, watching the money as it moves around a system that critics call the Wild West of finance.

But they are playing catch-up: the gaming company that got scammed apparently did not even notice for six days.

The hack is one of the biggest to hit the crypto world, raising huge questions about security in an industry that only recently burst into the mainstream thanks to celebrity promotions and promises of untold wealth.

The sector has been beset by scams and hacks.

This week's theft from the makers of Axie Infinity, a game where players can earn crypto through game play or trading their avatars, came just weeks after thieves made off with around $320 million in a similar attack.

"We are seeing more hacks because there is more money in blockchain," said Roman Bieda of Coinfirm, a crypto security company, referring to the technology that underpins cryptocurrencies.

The industry should have learned the lessons from previous attacks but security was still being sacrificed for profit, he added, labelling Axie's failure to notice the hack a "huge deficiency".

Refunds Promised

The Axie Infinity attackers exploited weaknesses in the set-up put in place by the Vietnam-based firm behind the game, Sky Mavis.

The company had to solve a problem: the ethereum blockchain, where transactions in the ether cryptocurrency are logged, is relatively slow and expensive to use.

To allow Axie Infinity players to buy and sell at speed, the firm created an in-game currency and a sidechain with a bridge to the main ethereum blockchain.

The result was faster and cheaper -- but ultimately less secure.

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