The breach highlights the compromises that come with high privacy and low regulation in the financial realm
Hackers stole $625 million in cryptocurrency in an intrepid attack on Axie Infinity, a video game in which players collect and mint NFTs which represent axolotl-inspired digital pets. Vietnamese studio Sky Mavis, the maker of the blockchain game, will be unable to recover the funds.
This marks one of the largest crypto thefts yet, as similar crimes become increasingly prevalent. In December of last year, Bitmark took a $200 million hit as the result of a hack, and months prior, Poly Network was robbed of over $600 million. While individual users of these platforms are usually unaffected by such hacks—with the host bearing the financial burden—these sorts of targeted vulnerabilities in the blockchain validate the fears of those hesitant to enter the cryptosphere, which primarily holds allure in its alleged security. The privacy that also marks its appeal makes it difficult to track down the culprits of such attacks.
Contemporary banking systems have been developed over millennia and still carry obvious flaws. The blockchain is, relatively, extremely new and holds appeal in its youth, which promises massive growth. The problem is, it’s playing trial and error with bigger numbers, which makes it less accessible for those who want to buy in without much expendable income.
With hacks like this, questions of regulation are introduced: What does prosecution look like? Can accountability for those who work outside the agreed upon morals of the system exist without compromising the freedom and sense of privacy that makes cryptocurrencies appealing?
Obviously, such hacks inspire stronger securities for platforms, but until they become impenetrable, what do they mean for the moral integrity of crypto?