Crypto Casino Stake.com Hit By $40 Million Hack

Updated: 08 March 2024

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

Online crypto gambling platform, Stake Casino confirmed it was hit by a hack with online sleuths estimating losses at up to $40 million.

Cyvers, a Web3 security firm, tweeted that its AI-powered cybersecurity system detected multiple suspicious transactions on the platform with its preliminary research indicating a transfer of roughly $16 million in ETH, USDC, USDT, and DAI was made to the hacker’s wallet address.

🚨ALERT🚨Our AI-powered system has detected multiple suspicious transactions with @Stake.https://t.co/0ZoMITOyF5 address received about $16M in $ETH $USDC $USDT and $DAI

All the stable coins are converted to $ETH and distributed to different EOAs.

FYI: @tayvano_ @zachxbt pic.twitter.com/CSGwRHEiVm

— 🚨 Cyvers Alerts 🚨 (@CyversAlerts) September 4, 2023

The hacker also changed all stablecoins into ETH and dispersed them to various accounts that were owned by third parties, it said. Two hours prior to moving $16 million worth of cryptocurrencies to the aforementioned wallet address, Stake also moved an additional $20 million to the same wallet, it said.

The reports were seconded by blockchain security and data analytics firm Peckshield, which asked Stake.com to take a closer look at the suspicious activity on the platform.

Blockchain detective and on-chain analyst, ZachXBT, also confirmed that about $40 million had been fraudulently transferred between several different blockchain networks, including Binance Smart Chain, Polygon, and Ethereum, that is “~$15.7M” and “Another $25.6M.”

Another $25.6M was drained on BSC and Polygon

— ZachXBT (@zachxbt) September 4, 2023

As a result of the transfers, there is about $2 million worth of assets remaining in Stake’s wallet, says Tommy WorldPower, the CEO of Ethereum L1 blockchain, Energi.

In response to the reports, the Ethereum blockchain explorer Etherescan highlighted the address responsible for moving the funds, which was thought to be a hack, and tagged it as “Stake.com Hacker.”

Stake.com Says User Funds ‘Safe’

When the reports started surfacing, Stake.com made an announcement that seemed to downplay the attack. “Three hours ago, unauthorized [transactions] were made from Stake’s ETH/BSC hot wallets,” it said. “We are investigating and will get the wallets up as soon as they’re completely re-secured. User funds are safe.”

Three hours ago, unauthorised tx’s were made from Stake’s ETH/BSC hot wallets.

We are investigating and will get the wallets up as soon as they’re completely re-secured.

User funds are safe.

BTC, LTC, XRP, EOS, TRX + all other wallets remain fully operational.

— Stake.com (@Stake) September 4, 2023

The Ethereum-based crypto-betting platform halted its withdrawals for four hours to conduct further investigation after which it resumed transactions. Stake said, “All services have resumed! Deposits & withdrawals are processing instantly for all currencies.”

Due to the exploit, the site also launched a user reimbursement program where the platform would distribute temporary user compensation to every user in an effort to restore market sentiment. As Stake struggles to recover, users are now on the lookout for a better alternative.

Stake.com was established in 2017 and it quickly became known as one of the biggest online casinos. The site’s main areas of focus include sports betting and casino games like slots, blackjack, and roulette.

Stake.com is known for using cryptocurrencies rather than traditional money in its transactions. The platform supports 18 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Ripple (XRP), Tether (USDT), USD Coin (USDC), and ApeCoin (APE).

To draw and keep customers, the online gaming platform also runs a number of bonuses and promotions. These could include free bets, loyalty programs, and deposit bonuses. Stake has partnered with well-known individuals over the years, including UFC fighter Israel Adesanya, Argentine football star Sergio Agüero, Formula One reserve driver Pietro Fittipaldi, and Canadian singer Drake.

The platform made $2.6 billion in revenue in 2022, according to a Financial Times report.

Crypto exploits continue to increase as the crypto industry grows. The industry is now worth $2 trillion with losses to scams and hacks standubg close to $1 billion so far this year, according to CertiK.

Of the amount lost this year, CertiK stated that more than $596 million was lost to hacks. An additional $137 million was lost to exit scams, while more than $261 million has been lost to flash loan attacks this year.