Axie Infinity's Co-Founder Falls Victim to a $9.7 Million ETH Hack

Alexander Aryan -

Jeff “Jihoz” Zirlin, the co-founder of the popular blockchain game Axie Infinity and the Ronin Network, faced a significant security breach as two of his personal crypto wallets were hacked, resulting in a loss of $9.7 million in Ether.

A Sophisticated Crypto Heist Unfolds

The hack came to light on February 23 when blockchain security firm PeckShield detected suspicious activity involving a "whale wallet" linked to the Ronin Bridge. The breach led to the theft of 3,248 ETH, which the hacker subsequently laundered through Tornado Cash, a platform known for obfuscating the origins of digital assets.

In response to the incident, Aleksander Larsen, another co-founder of the Ronin Network, reassured the community that the Ronin Bridge's security remained uncompromised, pointing towards a targeted attack on Zirlin's personal wallets instead. Larsen emphasized that the bridge has robust security measures, including an audit system and a mechanism to halt operations if it detects abnormally large withdrawals.

The Mechanism of the Attack

The breach was attributed to a "wallet compromise," allowing the attacker unauthorized access to Zirlin's funds. The precise method leading to the wallets' compromise remains undisclosed. However, Zirlin himself confirmed the breach of his wallets, clarifying that the attack exploited no vulnerabilities within the Ronin chain or Sky Mavis's operations.

PeckShield's analysis revealed that the stolen Ether was initially divided and transferred to three different wallets before being funneled through Tornado Cash, making the stolen funds difficult to trace and recover.

Comparing High-Profile Crypto Thefts

The incident contrasts with another high-profile hack that occurred in January, where $112 million was stolen from Ripple co-founder Chris Larsen's personal wallet. Unlike the discreet approach taken by Zirlin's hacker, Larsen's attacker did not employ mixer services or decentralized exchanges to conceal their tracks, enabling Binance to freeze approximately $4.2 million of the stolen assets.