Posted On March 30, 2022 Consumer Privacy & Data Breaches
Earlier this week, the online game Axie Infinity experienced a massive crypto hack, resulting in what was perhaps the largest loss of crypto assets in a single hack. According to the makers of the game, as well as the company that oversees the back-end administration of the complex blockchain bridge allowing for the deposit and withdrawal of funds into the game, a hacker was able to make off with more than $615 million in Ethereum and USDC, which is a stablecoin that is pegged to the U.S. dollar.
The crypto theft and consumer privacy lawyers at Console & Associates, P.C. are actively investigating the Axie Infinity breach. As a part of this investigation, we are scheduling free consultations with anyone who lost money in the recent hack and wants to learn about their options for recovering their money. While Sky Mavis, the creators of Axie Infinity, announced its intention to either recover or reimburse all funds that were lost, only time can tell if the company intends to carry through with this promise.
Axie Infinity is a new type of inline game in which users can buy and sell non-fungible tokens (NFTs) in the game. While the concept behind NFTs is rather complex, essentially, they rely on the same blockchain technology as cryptocurrency. In the context of Axie Infinity, users can develop their “Axies” in-game and then sell them to other users.
The game also uses an in-game currency, which can be purchased with either Ethereum or USDC. However, because many cryptocurrency holders own assets across multiple blockchain ecosystems, Axie Infinity used the Ronin Bridge to connect the game to other blockchains. This makes it easier for users to deposit and withdraw assets.
Apparently, the blockchain technology behind the game has 9 “validator codes.” Before a user can deposit or withdraw money, five out of the nine validator signatures are needed. These validator codes are spread out across different environments, making it difficult for someone to make a fraudulent withdrawal. However, in this case, the hacker was able to access five of the nine validator codes; 4 through the creator of Axie Infinity and one through the Axie Decentralized Autonomous Organization.
Victims of the Axie Infinity breach are not without a remedy. However, it may not be as easy as calling up the creator of the game and asking for your missing cryptocurrency. The problem is that the very nature of decentralized finance (“DeFi”) is that it is unregulated. For many, this is a major advantage as it allows assets to be quickly transferred at a low cost. However, the lack of regulation makes enforcing your rights as a victim challenging.
At the law firm of Console & Associates, P.C., we have a comprehensive understanding of the current consumer protection laws in the United States, as well as how DeFi plays into the equation. We can help you understand your rights and what you need to do to pursue a claim against the parties responsible for your losses. Console & Associates, P.C. offers free consultations to all prospective clients, during which we will answer your questions in clear and understandable terms. That way, you can confidently make the best decision on how to proceed. To learn more, and to schedule a free meeting with a cryptotheft lawyer today, call 866-778-5500. You can also reach us through our online contact form.
