Vietnamese game studio Sky Mavis has announced that it has raised $150 million in funding led by crypto exchange Binance to reimburse users who lost money during the Axi Infinity hack, which has an estimated $625 million to earn. Biggest cryptocurrency heist ever. to date. Animoca Brands, a16z, Dialectic, Paradigm and Accel also contributed to the gains, according to Sky Mavis.
The new funds will be combined with cash from the Sky Mavis balance to pay out all users who lost money during the attack on Ronin, the Ethereum-based sidechain that powers the game. The company plans to reopen Ronin Bridge after a security update and audit, which it says could take weeks. Meanwhile, Binance provides liquidity by allowing Ronin users to freely withdraw and deposit ETH.
Binance is one of the few major crypto exchanges that directly integrates with the Ronin network and allows users to transfer funds from the platform to a Ronin wallet address. Today’s announcement appears to be the first time that Binance has invested directly in Sky Mavis.
Sky Mavis also cited the reason for the attack in a statement, “attributing it to a breach of a small set of validators that allowed the network to be compromised very easily.” The hacker was able to obtain five of the nine keys used to test the network, which was enough to withdraw the tokens from Ronin Bridge to an external wallet. The company said it plans to expand its group of validators from five to 21 within the next three months to avoid future risks.
Bloomberg reported last week that the company generated $1.3 billion in revenue in the 12 months to February, and Axi Infinity has $1.6 billion in “community treasury.” As a result of the hack, 56,000 ETH tokens (about $185 million at current prices) were compromised by the treasury – Sky Mavis says the funds will no longer be collateral as the company is working with law enforcement to recover them. The Axie community had to vote to approve the liquidation of one of the treasury funds to reimburse users, which may indicate that Sky Mavis was looking to raise funds from outside and build their own balance sheet instead.
It is incredibly difficult to get money back after a cryptocurrency hack, let alone return it directly to users. Most of the money is still in the hacker’s wallet, although the hacker appears to have transferred about 2,000 ETH from the wallet to the Tornado Cash privacy tool, which allows users to hide their wallet address when withdrawing funds.
According to the company, Axie Infinity has 2.2 million monthly active players and is the most played NFT game ever. Sky Mavis last raised a $152 million Series B in October 2021, led by a16z, along with other venture capital firms including Paradigm and Accel, all three of which participated in today’s fundraiser.