Sky Mavis Raises $150M in Binance-Led Funding for Ronin Bridge Refund

A funding round led by Binance has raised $150 million to reimburse victims of the recent attack that resulted in $622 million getting drained from Sky Mavis's Ethereum sidechain, the Ronin network.  

Other companies in the funding round include Animoca, the company behind the popular crypto game The Sandbox, alongside tech venture capital firms a16z and Accel. Crypto investment firms Paradigm and Dialectic also contributed.

Sky Mavis and Axie Infinity will use the funding and pool from their balance sheets to ensure that Ronin Network users can withdraw and deposit freely. 

The Ronin bridge is not expected to be fully operational until it has undergone audits and security updates. 

The funds stolen from Axie's DAO treasury will remain undercollateralized as Sky Mavis cooperates with law enforcement to recover the funds. 

Should the funds not be recovered after two years, the DAO will vote on the treasury's next steps. 

What was the Ronin attack?

The hack, which is one of the largest in crypto history, took place on March 23 but wasn't discovered until March 29. 

In a blog post, the Ronin team said it believes the hackers accessed the funds through "hacked private keys" used to forge two fake withdrawals. 

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The hackers were able to withdraw 173,600 Ethereum and 25.5 million USDC from Sky Mavis's Ethereum sidechain, the Ronin bridge. 

On Monday, the Ronin hackers moved $7 million in stolen funds into a Tornado privacy wallet. 

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A press statement from Sky Mavis describes the hack as "socially engineered" and says the cause of the security breach was a small validator set. The company says it will be able to expand the number of validators from five to twenty-one in just three months with the new funding. 

The statement also says the validators will be "various stakeholders in the Axie community, and will together manage an open-source codebase."