Crypto Gaming Platform Stake.com Loses $40M in Hack

Article by : Erik Gibbs Sep 6, 2023

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The crypto betting platform Stake.com has quickly bounced back from a hacking incident. It is now estimated that the gaming platform may have lost about $41.3 million, according to various related blockchain security firms.

Stake confirmed it had fully restored its services by 9:28 PM UTC on September 4. The company took control of its operation just a few hours after detecting unauthorized transactions on Stake’s ETH/BSC hot wallets.

While the platform assured users that their Bitcoin, Litecoin, and XRP wallets remained unaffected, it has not yet disclosed the cause of the scheme or the exact amount stolen. Nevertheless, Stake emphasized that user funds remained secure.

Analysis conducted by the blockchain security firm Beosin estimated the total loss to be around $41.35 million. The amount was set to be $15.7 million from Ethereum, $7.8 million from Polygon and an additional $17.8 million from the BNB Smart Chain.

An earlier estimate of $15.7 million by another blockchain security firm, PeckShield, did not account for the alleged $25.6 million lost on BSC and Polygon. A blockchain analyst identified the calculation error and corrected the estimate.

The initial unauthorized transaction took place Monday afternoon. The first fraudulent transfer was approximately $3.9 million of the stablecoin Tether. The amount was swiftly moved from Stake to the attacker’s account.

Subsequent transactions removed over 6,000 Ether. These were later valued at around $9.8 million at current prices. The attacker withdrew additional digital currencies in the following minutes, including approximately $1 million in USDC and others.

The following transactions also extracted an additional $900,000 worth of DAI and 333 Stake Classic tokens worth $75 each. These withdrawals are believed to account for the initial $15.7 million lost on the Ethereum network.

The confirmation of the hacking incident by the crypto-betting platform came shortly after users on X, formerly known as Twitter, reported that Stake.com had suffered a loss of digital assets. The initial loss was estimated to be worth millions of dollars.

Online investigators suggested that hackers had initially made off with assets valued at nearly $16 million. The attackers followed their initial scheme, amounting to an additional $25 million.

In response to the situation, Stake.com, which boasts the endorsement of Canadian singer and celebrity Drake, released a statement on X (formerly Twitter). The company confirmed the situation with its users.

The platform assured that BTC, LTC, XRP, EOS, TRX and all other wallets remained operational. Regarding the incident, Stake.com co-founder Ed Craven commented that Stake always held a small portion of its crypto reserves in hot wallets.

Craven added that this strategy was employed for numerous reasons and that all affected wallets would be operational shortly after the statement was released—however, Craven and the crypto-betting platform refrained from disclosing the exact value of the stolen digital assets.