Axie Infinity developer Sky Mavis revealed that recovering stolen crypto funds could take two years, but its ready to play the “long game.”
During NFT LA, the P2E platform revealed it was the victim of an exploit that resulted in the loss of over $600 million in cryptocurrency – the largest hack to date. While Axie Infinity has been able to raise money from investors to refund some of those users who lost their funds, it also knows it’s a long road ahead to even retrieve a “portion” of the stolen crypto.
Last Thursday, Sky Mavis’ chief operating officer, Aleksander Leonard Larsen, spoke with Bloomberg, the company’s chief operating officer, Aleksander Leonard Larsen, explaining that recovery of the funds might be a lengthy process.
“What we are assuming over the next two years is that some funds will be recovered,” Larsen said. He believes that’s enough time to get more information about the hack, emphasizing the company’s readiness to play the long game:
“Two years for Axie is a good time for us to get more information. We’re here to play the long game.”
Currently, Sky Mavis is working with law enforcement to trace the stolen tokens, but it hasn’t offered any update on the investigation. Recovering the funds will be a massive boost for the company, given that it had to take $450 million off its balance sheet to refund all those affected.
Yet, the chances of recovering the funds are very slim based on precedents. Given that ETH has been the primary subject of theft, on-chain data reveals that a portion has been moved to the Ethereum mixer, Tornado Cash.
The reality of not obtaining a “full recovery”
Sky Mavis has tamed the platform’s expectations by only looking forward to recovering part of the loot. According to the lead investigator at Merkle Science, Rishav Rai, it’s rare for proceeds of large crypto hacks such as these to be fully recovered; but, it’s also a challenge for hackers to liquidate the stolen assets.
Crypto mixers such as Tornado Cash aren’t built for this volume of cash, and it’s easier to detect any movement of large amounts of crypto between wallets or to a centralized exchange. That’s why it’s not surprising that the last time someone stole this much money, they returned most of the funds.
While Sky Mavis is making plans to refund users, many others are leaving the platform, which predated the March hack due to the platform’s drop in the game rewards. The level of these hacks show the vulnerability of crypto platforms which has already led to over $1 billion worth of hacks in the first quarter of this year.
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