Vietnam game developer hit by crypto heist raises $150m

Viet · Apr 7, 2022

Sky Mavis says resumption of withdrawals and deposits could take several weeks

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Sky Mavis, with the help of Binance and other investors, is taking steps to limit damage from a major cryotocurrency theft. (Source photos by Reuters and courtesy of Sky Mavis)
WATARU SUZUKI, Nikkei staff writerApril 6, 2022 20:59 JST

TOKYO -- Sky Mavis, the Vietnam-based startup that suffered one of the largest cryptocurrency heists on record, on Wednesday said it raised $150 million in a funding round led by crypto exchange Binance.

The money will be used to reimburse user funds affected by the hack, the company said in a news release.

"The new funding round, combined with Sky Mavis & Axie Infinity balance sheet funds, will ensure that all users are able to withdraw and deposit freely," it said.

Animoca Brands, a16z, Dialectic, Paradigm and Accel participated in the round. Sky Mavis did not say whether its valuation had changed from its previous funding round last year, which was $3 billion.

The move is a major step toward regaining trust from users after the theft that shocked the crypto industry. Sky Mavis is the developer behind crypto game Axie Infinity, which has emerged as one of the most popular applications of cryptocurrency to date with more than 2 million daily active users before the hack. It has become particularly popular in countries such as the Philippines as part of the "play to earn" phenomenon, where users can earn cryptocurrency by playing the game.

Sky Mavis was due to release a major upgrade of Axie Infinity on Thursday.
Last week, it was revealed that 173,600 Ethereum coins and 25.5 million USDCs, a cryptocurrency pegged to the U.S. dollar, were stolen from Ronin, a blockchain network that Sky Mavis had developed to help lock in users' cryptocurrency into Axie Infinity.

A function on Ronin, called the bridge, is used to transfer users' cryptocurrency to and from the Etherum blockchain. Sky Mavis said the attacker was able to steal the coins by taking control of five of nine computers, known as validator nodes, required to authorize such transfers.

Sky Mavis has suspended the bridge function, thus prohibiting users from moving their cryptocurrency from Ronin. It said the bridge will reopen after it has gone through a security upgrade and several audits, which could take several weeks. It will increase the number of validators to 21 within the next three months.

In addition to the funding, Sky Mavis said it will work together closely with Binance on projects. "We strongly believe Sky Mavis will bring a lot of value and growth for the larger industry and we believe it's necessary to support them as they work hard to resolve the recent incident," said Binance CEO Changpeng Zhao.