Binance Recovers Nearly $6 Million from Hackers of Axie Infinity

The popular cryptocurrency exchange Binance reportedly recovered a total of $ 5.8 million of the approximately $ 650 million stolen by North Korean hackers from the popular play-to-earn (P2E) platform Axie Infinity.

In a tweet published this morning, the founder of the global crypto exchange, Changpeng Zhao, a.k.a CZ, said that the funds were spread across 86 different accounts at Binance.

The funds will be used to compensate the users who lost millions as a result of the hack. Binance also helped Sky Mavis, the company behind the popular blockchain-based game, to raise a total of $ 150 million to reimburse the victims of the breach.

Only a few days ago, authorities from the United States identified a group of hackers sponsored by the North Korean government known as Lazarus to be the perpetrators of the cyber attack.

According to the developers, hackers exploited a vulnerability in Sky Mavis’s systems to get access to its privileged access to the Axie Infinity blockchain to drain the funds contained within the Ronin Bridge.

The Ronin Bridge, the application used to facilitate the transfer of ERC-20 tokens to the Axie Infinity platform, has remained shut down since the incident occurred.

DeFi Hacks on the Rise, Chainalysis says

In a report published on 14 April, the on-chain data analytics firm Chainalysis stated that cyber attacks on decentralized finance (DeFi) applications increased significantly in 2021.

According to the report, the total number of hacks more than doubled compared to 2020 with a total of 251 reported incidents recorded during the year while the total amount of funds stolen surged to $ 3 billion compared to around $ 500 million hackers managed to get their hands on the previous year.

Meanwhile, in relative terms, the amount of money stolen from DeFi apps accounted for more than 90% of the total stolen funds, up from a total of 70% of the incidents they accounted for in 2020.

Code exploits and security breaches remain the most widely used mechanisms to get access to users’ wallets and funds. Code exploits seek to identify vulnerabilities in the coding and governance structures of the DeFi projects to design attacks that allow hackers to make changes to the smart contract that powers the app.

Meanwhile, security breaches consist of getting access to high-level credentials that allow the hacker to push and approve directives that facilitate the process of siphoning the money from the project’s capital pool.

In most cases, the report cites, the money drained is rapidly laundered by using sophisticated on-chain protocols to conceal the identity of the hacker and scatter the loot among hundreds or even thousands of digital wallets to make it more difficult for regulators and cyber security firms to identify where the money has gone or who might be behind the attack.

The latest attack on Axie Infinity via the Ronin network and another one against the Poly Network remain the most prominent incidents of 2021/2022 with more than $ 1.2 billion stolen from the two projects as a result.

In an interesting turn of events, the hacker behind the Poly Network attack ultimately returned the stolen funds.

This kind of incident is known as “white hacking”, which is a practice that seeks to reveal the vulnerability of a certain system – in this case, a blockchain-based app – to prompt the developing team to fix the issue and make the project safer.

In a message embedded in a crypto transaction, the Poly hacker reportedly stated that his actions should be considered an effort to “contribute to the security of the Poly network project in my personal style”.

Crypto assets are highly volatile unregulated assets. Your capital is at risk.

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