- Mixin Network disclosed a significant cryptocurrency loss of $200 million on September 23.
- PeckShield’s examination suggests the hacker had past interactions with Mixin Network.
- Mixin Network’s response to the situation has remained largely reserved, causing speculation.
In a recent troubling event, Mixin Network, a decentralized platform for peer-to-peer transactions, announced a substantial financial setback—losing around $200 million in digital currency assets. Initial investigations point to a loophole in an external cloud service provider’s database being the potential cause.
Reacting swiftly, Mixin Network suspended all money intake and outflow activities. They sought the expertise of SlowMist, a recognized authority in blockchain, and the technological prowess of Google to unravel the details of the intrusion and strategize the retrieval of the misplaced assets. A breakdown of the missing funds includes Ether (ETH) having a value of $94.48 million, Dai (DAI) tagged at $23.55 million, and Bitcoin (BTC) priced near $23.3 million. Collectively, these assets were assessed at roughly $141.32 million.
An additional layer of understanding was added by a study conducted by PeckShield, which showed a detailed distribution of the digital currencies and their associated worth when the breach happened. Adding to the intrigue, the analysis tool, Web3 SaaS 0xScope, made a startling revelation—the hacker’s traces were found to have older ties with Mixin Network. Significantly, last year, an electronic wallet with the address 0x1795, believed to be connected to the hacker, recorded a transfer of 5 ETH from Mixin. Later on, these funds found their way to the Binance exchange.
The network’s main priority is addressing this lapse in security. They’ve given assurances that their transaction services will remain on hold until they’re confident in the platform’s safety. The specifics about how they plan to make things right for the affected parties, however, are yet to be detailed.
There was a buzz in the online community about Mixin’s founder, Feng Xiaodong, potentially clarifying the situation in a Mandarin broadcast scheduled for September 25.
Communication from Mixin Network has been limited. In related cybersecurity concerns, a leading figure in the digital currency landscape, Buterin, narrated his ordeal with a SIM swap attack, where a cunning individual duped T-mobile, hijacking his phone number. These types of attacks exploit phone numbers to override two-step verification, letting attackers sneak into numerous private accounts.
Crypto Hacks Have Risen as of 2022
The frequency of cryptocurrency-related cyberattacks has seen a sharp uptick since 2021, causing increasing concern among stakeholders. Recent data indicates that the first seven months of 2022 experienced a theft of digital currencies totaling $1.9 billion from various platforms. This represents a concerning 60% increase from the same timeframe in 2021.
The situation appeared grim even in 2021 when the incidence of large-scale hacking grew by 79%, resulting in losses 60 times higher than in 2018. Alarmingly, blockchain bridges, a crucial component of crypto operations, have emerged as a significant point of vulnerability. They were implicated in 70% of the major thefts, culminating in losses nearing $2 billion. Since the start of 2021, individual users haven’t been spared either, with over 46,000 people reporting hack-induced losses. On average, affected users saw financial setbacks to the tune of $2,600.
This trend is somewhat paradoxical, given the broader context of the digital currency market. While crypto thefts spiked from 2019 to 2020, the larger landscape witnessed a decline in overall fraudulent activities during the same period.