How the $41 million attack on Stake poses uncertainty to the future of crypto gambling?
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Prior to its $41 million exploitation, Stake was one of the leading crypto gambling platforms, with thousands of users. The exploitation raised fears and doubts as regards the security of the platform. Don’t forget that the news of the exploitation dominated the airspace on September 4, 2023, leading to at least $41 million in withdrawals. According to Blockchain data, the attacker first transferred $3.9 million worth of stablecoin Tether from Stake to an account labeled on Etherscan as “Stake.com Hacker.” Subsequently, over 6,000 ETH worth over $10 million were also stolen by the same individual to the said account.
The attacker drained more funds before eventually making a move to distribute them to multiple accounts. Although blockchain security firms were the first to break the news of the attack, Stake was also swift in its response. The popular crypto gambling site, through its X account, confirmed the attack and vowed to investigate the circumstances behind it. In its statement, Stake claimed users’ funds remain safe despite the huge amounts withdrawn from the site by the hacker. According to its co-founder, Ed Craven, the platform diversified some of its crypto reserves into multiple hot wallets. Therefore, he claimed the losses suffered in the attack represent only a small portion of the total funds held by the project.
Meanwhile, a few days later, the Federal Bureau of Investigation (FBI) linked the North Korean Group, Lazarus to the attack. The FBI said it made the conclusion based on its investigation of the exploitation. The international security agency also gave further insights into where the funds were held. According to its statement, the stolen funds are on Bitcoin, Ethereum, Polygon and BNB chains. Therefore, calling these protocols to review the addresses used in the hack.
Implications of Stake hack on the future of crypto gambling
The hack on Stake Casino has raised questions about the safety of crypto gambling. These concerns emanated as a result of the losses the hack inflicted on gamblers. To an extent, gamblers faulted the defense system of the Stake and other crypto-gambling platforms at large. More so, they were concerned about how an industry with huge investment therein is vulnerable to such a form of attack.
Likewise, some gamers felt the online casino and sports betting platform didn’t do well enough to curtail the attack. Due to these worries, gamblers have grown skeptical of using crypto casinos and other betting sites relating to the innovation. There are growing concerns that most of the platforms have weak defense mechanisms that could allow future attacks and inflict more damage.
Furthermore, the hack on Stake has exposed some of the dangers attached to using crypto gambling and sports betting sites. Gamers have come to realize the impact of playing on platforms that are not allowed to operate in their country. Most crypto-gambling platforms are not regulated in high-profile countries. However, gamers in these countries often bypass the restriction with the aid of a VPN.
Now, it has dawned on gamers that bypassing such regulatory restrictions has a huge implication. In the face of a hack or meltdown, players accessing restricted platforms through VPN cannot pursue any legal action to reclaim their funds. Consequently, leaving them to bear the loss alone. As it stands, the future of crypto gambling is in limbo with concerns about its future.
Conclusion
Note that the attack on Stake doesn’t entirely indicate that all crypto casinos and sports betting sites are vulnerable. While gamblers may have their fears and concerns, there are still a host of platforms that are well-protected against bad actors. Also, the hack on Stake is insignificant to the overall well-being of the industry.
The platform only represents a minor segment of the sector. Therefore, it would be illogical to rate the entire crypto casino and sports betting industry due to what happened to Stake. Without a doubt, the attack on Stake has dented the status of crypto gambling. However, there are assurances that the sector will definitely bounce back.
