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Binance Leads $150 Million Funding Round To Bailout Users Affected By Ronin Network Exploit

Binance Leads $150 Million Funding Round To Bailout Users Affected By Ronin Network Exploit

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The world’s largest cryptocurrency exchange, Binance, joined hands with a host of other investors to close a $150 million funding round. The funds raised in the round, along with the Sky Mavis balance sheet funds, will be utilized to ensure that the users affected by the Ronin Validator Hack will be reimbursed. 

Details Of The Funding Round 

Sky Mavis shared details of the funding round led by Binance, which would be used as a bailout fund for victims of the hack. Apart from Binance, the funding round also saw participation from a16z, Animoca Brands, Dialectic, Accel, and Paradigm. The funding round successfully raised $150 million. One of the largest crypto heists in recent memory, the hack saw hackers make off with nearly $615 million after compromising the Ronin Validator nodes. 

Sky Mavis released a statement stating its intention to reimburse its users.

“Sky Mavis is committed to reimbursing all of our users’ lost funds and implementing rigorous internal security measures to prevent future attacks. With the support of Binance and other industry leaders, we will be able to quickly expand the validator set from five to 21 validators to ensure the security of the Ronin network. While we address this issue, we are also focusing on the future, starting with tomorrow’s launch of Axie Infinity: Origin. We are also thrilled to collaborate with Binance NFT on future projects.”

Details Of The Hack 

On 23rd March 2022, cryptocurrency hackers pulled off one of the biggest crypto heists in recent memory, as nearly $615 million worth of crypto was stolen from the blockchain company Ronin Systems. Hackers managed to steal 173,600 ETH and 25.5 million USDC from the Ronin Bridge as Sky Mavis’ Ronin validator nodes and Axie DAO validator nodes were compromised. 

Ronin Systems stated in a blog post that the hacker had used stolen private keys and passwords to drain the funds. However, most of the funds remain in the hacker’s wallet. Axie Infinity, one of the most popular blockchain-based games, is powered by the Ronin Blockchain. The game has been receiving considerable support on social media. 

Axie Receives Significant Support 

Axie has been receiving significant support on social media and has seen Binance extend support to its users. Huobi Global tweeted that any stolen assets discovered on its exchange will be dealt with accordingly. 

“Huobi will fully support @AxieInfinity as it deals with the aftermath of the attack and theft on its Ronin chain. Any stolen crypto assets that have been discovered to have traversed our exchange and related networks will be dealt with expediently.”

Binance CEO Changpeng Zhao stated, 

“Sky Mavis is committed to reimbursing all of our users’ lost funds and implementing rigorous internal security measures to prevent future attacks. With the support of Binance and other industry leaders, we will be able to quickly expand the validator set from five to 21 validators to ensure the security of the Ronin network. While we address this issue, we are also focusing on the future, starting with tomorrow’s launch of Axie Infinity: Origin. We are also thrilled to collaborate with Binance NFT on future projects.”

Sky Mavis Outlines Next Steps 

Sky Mavis acknowledged that while striving for mainstream adoption, it had made some trade-offs that could have left it vulnerable to this sort of attack. The company also addressed how it would be improving security, stating that it would increase the validator group’s size to 21 within three months. This will be split between different stakeholders, including partners, long-term allies, and community members. 

The compromised Ronin Network Bridge will undergo a security upgrade and a string of audits which would take several weeks. Only after these are completed will the Ronin Network Bridge be opened. Ronin has received support from Binance, which provides ETH withdrawals and deposits for users of Axie Infinity. Furthermore, the 56,000 ETH compromised from the Axie DAO Treasury will remain undercollateralized as Sky Mavis works with the relevant authorities to retrieve the funds. If the funds are not recovered within two years, the Axie DAO will vote on the next course of action. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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