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How This Crypto Gaming Project Lost $7 Million to Hackers

2 mins
Updated by Ryan James
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In Brief

  • Gamee, a subsidiary of Animoca Brands, lost $7 million in a hacking attack involving unauthorized access to its token contracts.
  • The hackers stole 600 million GMEE tokens, converted them into Ethereum and Polygon, causing a 45% drop in GMEE's price.
  • In response, Gamee transferred token contracts ownership to a secure address, halted liquidity provisioning, and initiated legal proceedings.
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In a staggering cyber-heist, Gamee, a subsidiary of Animoca Brands, fell victim to a sophisticated hacking attack resulting in the loss of $7 million.

The attack, executed on Monday, involved unauthorized access to the Gamee token (GMEE) contracts on the Polygon network.

How Hackers Stole 600 Million Gamee Tokens

The hackers stole 600 million GMEE tokens (worth nearly $7 million) and quickly converted them into Ethereum (ETH) and Polygon (MATIC).

Read more: Crypto Project Security: A Guide to Early Threat Detection

Web3 security firm Cyvers reported that the hackers bridged some funds to the Ethereum blockchain. Also, these transactions showed interactions with the crypto exchange WhiteBit.

“Our preliminary investigations indicate that, at 22/1 6:31 pm (UTC), Polygon GMEE deployer address may have been compromised via unauthorized GitLab access, leading to the theft of 600M GMEE tokens and subsequent unauthorized conversions to ETH and MATIC. Over the next few hours the exploiter exchanged the compromised tokens via various DEXs, impacting the GMEE token price across various exchanges,” said Gamee.

The Aftermath

Gamee’s response was crucial in containing the fallout. The team immediately secured the token contracts by transferring ownership to a new secure address, effectively blocking further unauthorized access. Importantly, the hack targeted Gamee’s proprietary team token reserves; however, community-owned assets remained untouched.

The company emphasized that they do not manage or custody community-owned assets.

The incident, which has sent shockwaves through the cryptocurrency community, saw a precipitous 45% drop in the price of GMEE. Some community members have voiced that buying back tokens to restore the price to pre-incident levels is essential. They argue that this action would demonstrate Gamee’s commitment to its community and help regain lost trust.

Gamee (GMEE) Price
Gamee (GMEE) Price. Source: BeInCrypto

In response to the crisis, Gamee has taken several decisive actions. They temporarily halted liquidity provisioning on all DEXs and notified centralized exchanges featuring GMEE markets to disable deposits and freeze tokens linked to the hack temporarily.

Moreover, the team conducts a thorough security review of all existing procedures and contracts. Law enforcement agencies have also been engaged to initiate legal proceedings against the Gamee hackers.

The next steps for Gamee are crucial in rebuilding trust within its community. Recognizing the adverse effects on their users, the company is committed to identifying impacted members and exploring ways to support them during this challenging period.

Read more: Top 5 Flaws in Crypto Security and How To Avoid Them

The Gamee hack represents a broader trend of security issues prevalent in the crypto sector. As the market evolves, the need for robust security measures and proactive community engagement becomes increasingly paramount.

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Harsh Notariya
Harsh Notariya excels in delivering SEO-optimized crypto news under tight deadlines. Previously, as a Growth Marketer at Sporty and a Community Consultant at Totality Corp, he significantly boosted community engagement and followers. Harsh also crafted engaging content for top crypto influencer Shivam Chhuneja, blending meme references for an educational yet fun experience. His versatile skills make him a notable figure in crypto journalism.