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Ronin users will be reimbursed for hacker attack, says executive

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Users who lost funds in the Ronin network bridge attack will be refunded. According to Sky Mavis, the company behind the game Axie Infinity, those who lost Ether (ETH) and USDC will have their funds returned.

According to information, Sky Mavis has about $1.6 billion in its treasury reserve, and can use some of those funds to make up for losses. Refunding is the most viable alternative, as the chance of recovering the funds is very low, according to the company.

As reported, the attack took place on March 23, but was only discovered last Wednesday (30). The hacker managed to steal 173,000 Ether (ETH) and 25.5 million USDC for a total of $625 million. As a result, this has become the biggest hacking attack in cryptocurrency history.

Understand the attack

The attack did not take place on the Axie Infinity blockchain, but rather on one of the bridges. Blockchain bridges allow holders of cryptocurrencies on one blockchain to exchange their tokens for equivalent assets on other networks.

In that sense, someone who has ETH can send it from the ETH blockchain to Ronin, for example. The original ETH are exchanged for wrapped versions known as Wrapped.

In this way, bridges facilitate the exchange of tokens between different blockchains. However, they are also precious targets for hackers, as they are not very secure structures. Although blockchain is very difficult to hack, bridges do not enjoy the same security.

The hacker gained access to the funds precisely by exploiting gaps in the bridges. Also, the Ronin network was very centralized, with only nine validator nodes, five of which were controlled by the hacker. He then managed to validate the transactions and steal the funds.

Of the 173,000 ETH stolen, about 56,000 belonged to Ronin’s Treasury, almost a third of the stolen value. According to Leonard Larsen, director of operations at Sky Mavis, none of the ETH or USDC wrapped in Ronin is backed.

Can funds be recovered?

About 24 hours after the attack, some repayment plans began to settle. Sam Peurifoy, head of Axie Infinity’s Kapital DAO, suggested that the company sell part of its funds to reimburse injured customers.

Another possibility would be the recovery of stolen values, as the hackers are being sought. However, Rishav Rai, a researcher at Merkle Science, claims that the chance of recovery from this attack is low.

“When we look at the biggest cryptocurrency attacks and thefts that have taken place in history, it is very rare for funds to be recovered,” he said.

A similar hack took place last month when a bridge from Solana to ETH was also hacked. Wormhole had more than $300 million worth of ETH stolen, half of the amount siphoned off from Ronin.

In this case, the team has since claimed to recover all lost funds. But such cases are quite rare.

After the attack, AXS token dropped 11%, while Ronin’s RON token plummeted 25% in just 15 minutes.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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