In a bold cyberattack, Stake.com, a leading online gambling platform, fell victim to a $41.3 million hack, creating significant ripples in crypto gambling. The attack, orchestrated by the North Korean hacking collective Lazarus Group, targeted the platform’s hot wallets and impacted multiple cryptocurrencies. Following this breach, which temporarily suspended the platform’s services, users within the online casino and cryptocurrency communities called for immediate attention to security issues.
What is Stake.com?
Stake.com, an online cryptocurrency betting and casino platform, was established by Australia’s youngest billionaires, Edward Craven and Bijan Tehrani. Since its launch in 2017, this Curaçao-licensed platform has reportedly been generating daily earnings in the millions. However, it’s noteworthy that Stake.com is unavailable to Australian players due to legal restrictions. Currently, Stake.com is facing a legal battle over its name in Australia as another trading platform is also using the same name and is reluctant to relinquish it.
How Did the $41.3 Million Hack Happen?
During the breach, hackers targeted some of the platform’s hot wallets and executed unauthorized transactions, which included Tether stablecoin (USDT), Ethereum (ETH), USD Coin (USDC), Dai (DAI), and Stake Classic.
According to Stake.com, the hackers took advantage of a vulnerability within a third-party payment processor. They exploited a leaked private key to gain access and drain two of the platform’s hot wallets. Hot wallets are digital wallets used for the quick storage and transfer of cryptocurrency, offering convenience but also vulnerability to cyberattacks.
After the breach, the FBI identified the North Korean hacker group Lazarus as the responsible party. This group had previously carried out multimillion-dollar hacks in 2023, including a $100 million theft from the Atomic Wallet and a $60 million heist from CoinsPaid and Aplhapo.
The Aftermath of the Stake.com Hack
Digital security company Cyvers Alerts shared news of the hack through X (formerly known as Twitter), while Stake.com later confirmed the news on the same platform. However, the aftermath of the hack had more consequences than just leaving Stake.com millions of dollars short.
Now, people are demanding an explanation and a promise of safety from everyone involved with the company, including the CEO, Mladen Vuckovic, who recently spoke to ValiantCEO about the safety and reliability of the Stake platform.
Stake.com’s Losses
According to blockchain investigators PeckShield and ZachXB, the platform lost $15.7 million in Ethereum, $17.8 million in Binance Smart Chain, and $7.8 million in Polygon. Stake.com claims to have lost about 10% of its assets in the cyber attack. Luckily, the hack was detected within minutes, which allowed the company to suspend its platform and prevent further damage. An investigation was also launched immediately
Over a month after the attack, it is clear that the hack did not just affect Stake.com’s cryptocurrency assets but damaged the brand’s reputation, as the platform was known as the world’s largest and safest crypto casino. Co-founder Edward Craven claimed that such attacks are precisely the reason they only keep a small amount in their hot wallets, but the question about the security and safety of the funds remains open.
Effects on Stake.com Users
The funds stolen in the daring hack were the property of Stake.com, and none of the platform’s users’ funds were directly affected. However, the platform had to suspend withdrawals for several hours following the hack, inconveniencing players and leaving them fearing for their money. Several users shared their frustration through X, as they could not deposit or withdraw funds from their accounts.
Impact on the Crypto Gambling Industry
A multimillion-dollar hack on a prominent crypto gaming platform highlights the industry’s vulnerability to attacks, eroding trust in crypto gambling and impeding the growth of the leading crypto casino sites, especially in the face of repeated incidents. However, this incident also presents a silver lining by compelling the industry to enhance security measures and update safety protocols, turning the challenge into an opportunity for improvement.
Final Thoughts
The $41.3 million hack of Stake.com sent a frightening message to the cryptocurrency industry, demonstrating that certain aspects, like hot wallets, are far from safe from cyber attacks. This time, the players’ funds were unaffected, but if a subsequent attack does target them, the fallout might be devastating for this rapidly growing industry.
