Stake, an Australian crypto casino renowned for the integration of crypto assets into gambling, has fallen victim to a recent alleged exploit.
On-chain analysis firm Cyvers revealed that a jaw-dropping $16 million was siphoned off from the Ethereum network due to a “private key leak.”
The suspicious nature of the transfers, involving the swap of Tether’s USDT to Ethereum (ETH), has raised eyebrows and triggered an extensive investigation.
As the probe expands to other chains, losses of $17.8 million on the BNB Chain and $7.8 million on the Polygon Proof of Stake (PoS) chain have been discovered.
Leading blockchain investigator ZachXBT has corroborated Cyvers’ findings, shedding light on the gravity of the situation. The Ethereum network alone suffered losses of $15.7 million, while an additional $25.6 million vanished across Polygon and the Binance Smart Chain (BSC).
Etherscan data exposes that the compromised Stake wallet still holds $383,000 worth of ETH and $2.2 million in various altcoins (100 Tokens). Withdrawals from the affected wallet have been temporarily suspended, as the platform grapples with the aftermath of the heist.
The exploit has thrust Stake into a challenging position, necessitating a comprehensive response to address the breach, strengthen security protocols, and rebuild trust among its user base.
Known for its approach to cryptocurrency gambling, the platform now faces the daunting task of mitigating the financial and reputational repercussions of the incident.
The full extent of the exploit and any potential vulnerabilities exploited remain under investigation, leaving industry experts and stakeholders eagerly awaiting further developments.
The Rise Of Crypto Casino Era?
According to a Financial Times report, founded by Australian billionaire Ed Craven and his US co-founder Bijan Tehrani, Stake.com has experienced exponential growth, capitalizing on the surge of wealthy gamblers seeking the anonymity and convenience offered by cryptocurrency betting.
Despite its relatively recent inception, Stake.com has achieved success, becoming the seventh-largest gambling group globally in terms of revenues.
Estimates compiled by consultancy Regulus Partners for the Financial Times reveal that the platform generated a modest $105 million in gross gaming revenues in 2020. However, this figure soared to nearly $2.6 billion in the following year, as disclosed by the company’s accounts.
Per the report, Stake owes much of its triumph to the “natural synergy” between cryptocurrency and gambling. The platform tapped into the rising popularity of cryptocurrencies and leveraged them as a medium of exchange for betting, attracting a niche audience of risk-takers and crypto enthusiasts.
The Financial Times report highlights Stake.com’s emphasis on marketing as a crucial driver of its growth. Recognizing the challenges associated with blending crypto and gambling, the company invested heavily in marketing campaigns to establish itself as a trusted brand.
What’s more, high-profile partnerships with Premier League club Everton and Alfa Romeo’s F1 team, along with endorsements from celebrities like rap star Drake, further bolstered Stake.com’s reputation and enabled it to outshine larger competitors.
Nevertheless, Stake.com’s journey has not been without challenges and controversies. Added to the ongoing exploit, the report highlights a pending lawsuit filed by Christopher Freeman, a former business partner, who alleges theft of ideas and misconduct by Craven and Tehrani, seeking a staggering $400 million in damages.
Featured image from iStock, chart from TradingView.com