Axie Infinity’s Ronin network exploit was one of the largest DeFi hacks of all time. However, investigators are making progress: blockchain analytics firm Chainalysis announced today that more than $30 million in stolen cryptocurrency had been recovered.
Chainalysis announced the news at the official AxieCon event in Barcelona and published a blog post about its findings. Chainalysis, according to the firm, was able to track the funds—which the U.S. Treasury claims the funds were stolen by North Korea’s Lazarus hacker group, then laundered and sent to centralized exchanges.
Over $30 million in funds were recovered this week from Axie Infinity hack on March 23
According to Chainalysis, law enforcement officials were able to seize the crypto funds after they arrived at exchanges. The hackers hoped to exchange the tokens for fiat currency and then withdraw them.
On March 23, 173,600 WETH (Wrapped Ethereum) and 25.5 million USDC stablecoin were stolen from the bridge that connects Axie Infinity’s custom sidechain to the Ethereum mainnet.
That much cryptocurrency was worth $552 million at the time of the attack, but it had grown to $622 million by the time it was revealed to the public nearly a week later. Following the crypto market crash in May and the current cold weather, the hacked funds are now only worth about $307 million. As a result, investigators have recovered approximately 10% of the stolen cryptocurrency.
“This is the first time cryptocurrency stolen by a North Korean hacking group has been seized, and we’re confident it won’t be the last,” Chainalysis Senior Director of Investigations Erin Plante wrote.
According to CryptoSlam data, Axie Infinity is an Ethereum-based monster-battling game that is by far the most successful crypto game to date in terms of total NFT trading volume—more than $4 billion. The majority of that occurred during a busy six-month period in 2021.
Axie Infinity’s NFT and token prices collapsed in late 2021 and early this year. As a result, the game’s novel play-to-earn economy struggled amid an oversupply of reward tokens and flagging demand. Sky Mavis has since released an updated version of the game called Axie Infinity: Origins, which includes a free-to-play mode and changes to the rewards system.
The Ronin bridge attack was blamed on a lack of decentralization, with only nine validators in the mix—five of which Lazarus gained control of using hacked private keys, allowing the group to steal hundreds of millions of dollars in crypto.
In late June, Sky Mavis reopened the closed Ronin bridge and fully refunded all individual users. However, a 56,000 ETH hole remained in the Axie DAO treasury while law enforcement sought to recover funds. A Sky Mavis representative confirmed today to Decrypt that all recovered funds will be returned to the Axie DAO treasury.