Axie Infinity developer Sky Mavis has revealed that it could take two years to recover stolen crypto funds, but it’s ready for a “long game.”
During the NFT LA, the P2E platform revealed that it was the victim of a breach that resulted in more than $600 million in cryptocurrency losses — the largest hack to date. While Axie Infinity has been able to raise funds from investors to refund some users who lost their funds, it also knows that there is still a long way to go to recover the “part” of the stolen cryptocurrency.
Last Thursday, Sky Mavis COO Aleksander Leonard Larsen spoke with the company’s chief operating officer Aleksander Leonard Larsen to Bloomberg, explaining that getting the money back can be a lengthy process.
“We’re assuming some of the money will be recovered over the next two years,” Larson said. He believes there is plenty of time now to get more information about the hack, stressing that the company is ready for the long game:
“For Axie, two years is a great time to get more information. We’re here to fight the long game.”
Currently, Sky Mavis is working with law enforcement to track down the stolen tokens, but has yet to provide any updates on the investigation. Given that the company had to pull $450 million from its balance sheet to refund all those affected, getting those funds back would be a huge boost for the company.
However, based on precedent, the chances of getting the money back are very slim. Given that ETH has been the main target of theft, on-chain data shows that a portion was moved to the Ethereum mixer Tornado Cash.
The reality of not getting a “full recovery”
Sky Mavis tames the platform’s expectations by only looking forward to taking back some of the loot. According to Rishav Rai, lead researcher at Merkle Science, the benefits of large crypto hacks like this are rarely fully recovered. However, liquidating stolen assets is also a challenge for hackers.
Cryptocurrency mixers such as Tornado Cash are not built for this amount of cash, and it is easier to detect any movement of large amounts of cryptocurrency between wallets or to centralized exchanges. That’s why it’s no surprise that the last time someone stole so much money, they returned most of it.
While Sky Mavis is working on plans to refund users, many others are leaving the platform due to a drop in the platform’s gaming rewards, which predates the March hack. The extent of these hacks shows the fragility of crypto platforms, which have resulted in more than $1 billion worth of hacks in the first quarter of this year.
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