Binance to Help Sky Mavis Reimburse Victims of Recent Hack

Paigambar Mohan Raj
Source: Binance

On the 23rd of March, Sky Mavis, the company behind the popular NFT-based game Axie Infinity, was hit with what is being termed as the largest crypto hack in history. In a recent Reuters report, Binance, the largest cryptocurrency exchange platform, revealed that it is leading investors’ contributions to a $615 million bailout for the victims of the hack.

Sky Mavis said it will reimburse all the victims using a mix of internal assets and $150 million raised from investors including cryptocurrency exchange Binance and venture capital company Andreessen Horowitz (a16z).

Trung Nguyen, CEO of Sky Mavis, said,

“Sky Mavis is committed to reimbursing all of our users’ lost funds and implementing rigorous internal security measures to prevent future attacks.”

According to Sky Mavis, the hacked section of the network, a blockchain bridge called Ronin, which allows users to transfer funds in and out of the game, will reopen after a security upgrade and audits, which might take several weeks.

Binance CEO Changpeng Zhao stated,

“We strongly believe Sky Mavis will bring a lot of value and growth for the larger industry and we believe it’s necessary to support them as they work hard to resolve the recent incident.”

Neither Binance nor Sky Mavis has clarified how much of the $150 million would be provided by the former.

A blog post on the Axie Infinity website announcing the fundraiser said,

“While racing for mainstream adoption, we made some trade-offs that ended up leaving us vulnerable to this sort of attack. It’s a lesson that we’ve learned the hard way.”

Moreover, Axie Infinity has lost around 45% of its active users. However, the decline in users was ongoing since December, 4 months before the deadly hack. The reason for the decline has been pointed towards untimely updates to some of the game’s features which have frustrated players into leaving the platform.