Ronin's $615 million crypto heist

LONDON - Hackers have stolen cryptocurrency worth almost $615 million from a blockchain project linked to the popular online game Axie Infinity, the latest cyberheist to hit the digital asset sector.

Ronin, a blockchain network that lets users transfer crypto in and out of the game, said on Tuesday the theft happened on March 23 but was not detected until almost a week later. Read full story

Here's what you need to know about the Ronin heist.

CRYPTO'S A BIG DEAL NOW, RIGHT?

Indeed.

Bitcoin and other digital currencies have exploded into public view in recent years, with mainstream investors embracing the sector in droves during the COVID-19 pandemic.

The sector's now worth over $2.1 trillion. As money has poured in, the hacks and heists that have long plagued crypto have also grown also size. 

AND HOW DOES RONIN FIT IN?

Ronin is used in Axie Infinity, one of the world's most popular online games involving cryptocurrencies.

Its products include a digital wallet for storing crypto, and a "bridge" that allows users to move funds in and out of the game. This is where the crypto were stolen from.

Ronin takes its name from the samurai warriors of feudal Japan who did not serve any particular lord. The name "represents our desire to take the destiny of our product into our own hands," Axie Infinity said in a blog post.

Vietnam-based Sky Mavis, which launched Axie Infinity in 2018, did not respond to multiple requests for comment. Ronin also did not return Reuters' messages.

Jeffrey Zirlin, one of Axie Infinity's founders, said at a conference on Tuesday: "It is one of the bigger hacks in history and we're fully committed to continue building."

HOW DID THE HEIST HAPPEN?

The Ronin hacker used stolen private keys - the passwords needed to access crypto funds - Ronin said in a blog post, after targeting computers connected to its network that help confirm transactions.

Ronin said it discovered the hack on Tuesday and that it was working with "various government agencies to ensure the criminals get brought to justice".

The identity of the hackers is still unclear.

AND AXIE INFINITY?

Axie Infinity says it has 2.8 million daily active players, with some $3.6 billion previously traded on its marketplace, making it one of the most popular blockchain-based online games.

Set in a fictional universe, players can collect, trade and play with virtual creatures called Axies, which are traded in the form of non-fungible tokens (NFTs) and sell for hundreds of thousands of dollars.

It is the largest NFT brand by all-time sales volume, according to market tracker CryptoSlam.

The game has attracted venture capital funding, raising $152 million in October from investors including Andreessen Horowitz.

Axie and other "play-to-earn" games allow players to spend crypto and earn financial rewards. They have surged in popularity in the past year, as a frenzy in the NFT world prompted investors to speculate in the hope of large returns.

WHERE'S THE LOOT NOW? AND ARE USERS AFFECTED?

Most of the stolen funds are still in a digital wallet, which is available to view.

Blockchain Intelligence Group, a Vancouver-based crypto tracker, said that the hackers had moved a small amount of the funds to major exchanges FTX, Crypto.com and Huobi.

Huobi said it was investigating the hack and communicating closely with Axie Infinity. FTX and Crypto.com did not immediately responded to requests for comment.

Ronin said in a blogpost that Sky Mavis was "committed to ensuring that all of the drained funds are recovered or reimbursed," without giving details. Making sure there is no loss of funds "is our top priority", it added.

It said it was working with major blockchain tracker Chainalysis to trace the stolen funds. Chainalysis declined to comment.

-reuters

India to launch state-backed 'digital rupee', tax crypto

MUMBAI - India will introduce a state-backed "digital rupee" and impose a 30 percent tax on profits from virtual currencies, the government announced while unveiling the next financial year's budget.

The plans are a blow to one of the world's fastest-growing cryptocurrency markets, which has remained unregulated despite burgeoning local trading platforms and glitzy celebrity endorsements.

They make India the latest major emerging economy to rein in the sector, after China went even further in outlawing all cryptocurrency transactions last September.

"There has been a phenomenal increase in transactions in virtual digital assets," finance minister Nirmala Sitharaman told parliament, adding that the growth necessitated a proper tax framework.

Profits made trading cryptocurrencies and other digital assets will be taxed at 30 percent from April, while any losses from digital transactions will not be granted offsets against other income.

A one-percent tax will be deducted at the source for all digital asset transactions, including cryptocurrencies and NFTs, a move that the finance minister said would help the government track each trade.

Sitharaman also said the central bank would introduce a "digital rupee", based on blockchain technology, by the end of March 2023.

"Introduction of central bank digital currency will give a big boost to (the) digital economy. Digital currency will also lead to a more efficient and cheaper currency management system," she said.

Cryptocurrencies have been under scrutiny by Indian regulators since first entering the local market nearly a decade ago, with a surge in fraudulent transactions leading to a central bank ban in 2018.

India's Supreme Court lifted the restrictions two years later and the market has surged since, growing by nearly 650 percent in the year to June 2021 -- second only to Vietnam, according to research by Chainalysis.

Prime Minister Narendra Modi last year warned that Bitcoin presented a risk to younger generations and could "spoil our youth" if it ended up "in the wrong hands".

The government last year proposed banning "all private cryptocurrencies", but ultimately held back.

"It's good to finally have some clarity on the taxation aspect," said Sathvik Vishwanath, the co-founder of Unocoin, one of India's oldest crypto trading platforms.

"Now we can infer that if they are introducing taxation it's because they know that the ban (on trading cryptocurrencies) is not happening."

'More growth and more jobs' 

Tuesday's budget also included plans to ramp up infrastructure spending to support the economy's post-pandemic bounceback as officials grapple with rising inflation and unemployment.

Spending of 7.50 trillion rupees ($100 billion) will be directed to roads, railways, defence, housing and energy in the coming financial year, as the government eyes important state polls in the coming weeks.

"This budget is filled with possibilities for more infrastructure, more investments, more growth and more jobs," Modi said.

India is forecasting world-beating economic growth of up to 8.5 percent in the coming financial year, according to estimates released Monday. 

The budget was "short on big-bang proposals" but had struck a balance between recovery and improving the country's fiscal position, said Rudra Sensarma, an economics professor at the Indian Institute of Management Kozhikode.

India is nonetheless running a large budget deficit, which is forecast to fall slightly to 6.4 percent of GDP in 2022-23.

Agence France-Presse

YouTube will explore NFT features for creators

YouTube is exploring features for its video creators to capitalize on non-fungible tokens, its chief executive officer said on Tuesday, becoming the latest tech company to tap into a digital collectibles craze that has exploded in the past year.

"We're always focused on expanding the YouTube ecosystem to help creators capitalize on emerging technologies, including things like NFTs, while continuing to strengthen and enhance the experiences creators and fans have on YouTube," wrote YouTube CEO Susan Wojcicki in a letter on the company's 2022 priorities. 

NFTs are a type of digital asset which exists on the record-keeping technology blockchain. They have seen a surge in popularity over the last year, with people buying artwork and video highlights from sports games as NFTs.

Sales of NFTs reached some $25 billion in 2021, according to data from market tracker DappRadar, although there were signs of growth slowing toward the end of the year.

A spokesperson for Alphabet Inc's YouTube declined to share more details about the potential NFT features, which were first reported by Bloomberg News.

Last week, Twitter Inc announced the launch of a tool through which users can showcase NFTs as hexagonal profile pictures. The Financial Times reported this month that Meta Platforms Inc were working on ways to let users create and sell NFTs on Facebook and Instagram. In December, Instagram head Adam Mosseri said the company was exploring NFTs.

The popular short video app TikTok in September ventured into the craze, announcing an NFT collection designed by some of its top creators.

Reddit Inc has also been exploring the space: recent job listings from the company on LinkedIn advertised for several engineer roles for a "rapidly growing team that aims to build the largest creator economy on the internet, powered by independent creators, digital goods, and NFTs."

-reuters

Crypto market value tops $3 trillion for first time

LONDON - The world cryptocurrency market is worth more than $3 trillion for the first time, according to calculations Monday, as mainstream investors increasingly jump on board.

The value has reached $3.007 trillion (2.6 trillion euros), said CoinGecko, which tracks prices of more than 10,000 cryptocurrencies.

"The crypto market is growing at a mind-blowing speed," noted SwissQuote analyst Ipek Ozkardeskaya.

"A part of it is speculation of course, but a part of it is real," she told AFP.

"Crypto is now making its way to traditional finance and everyone is on board."

Bitcoin, the world's biggest cryptocurrency, hit a record-high $66,000 last month after taking another step towards mainstream status.

It surged back above $66,000 on Monday close to its all-time peak after a five percent jump.

Ethereum, the second biggest cryptocurrency by market value, hit a record high $4,768 on Monday.

A bitcoin futures exchange-traded fund, a type of financial instrument, launched on the New York Stock Exchange in October.

The ETF is a more accessible vehicle that puts bitcoin within the grasp of even more investors.

Some investors sees cryptocurrencies as a hedge against inflation, which is surging worldwide as economies reopen after pandemic lockdowns.

"Bitcoin is bouncing higher again, close to all-time highs," Hargreaves Lansdown market analyst Susannah Streeter said Monday.

"The recent surge in the crypto... partly seems to have been caused by investors piling in, seeing it as a hedge against inflation," Streeter added. 

No more than 21 million bitcoin can be created, helping its price to trade way above its rivals, but trading of cryptocurrencies in general has shown to be extremely volatile with massive price swings a common occurrence.

Agence France-Presse

Atari creates blockchain division for cryptocurrency, games

PARIS - Video game pioneer Atari announced on Tuesday the creation of a blockchain division that will seize on the technology to develop games and a cryptocurrency that players could spend on items.

Blockchain technology gives value to cryptocurrency and other "non-fungible tokens" (NFTs) -- such as digital works of art, photos or videos -- by making them impossible to duplicate.

The company said in a press release that it wanted to push its "Atari token" as payment for digital goods within the content on its own "Video Computer System" console and other platforms, but also third party games and applications.

"Atari will also continue to evaluate opportunities in blockchain gaming, NFTs, and blockchain-based online worlds," it said, citing "the immense possibilities of crypto and blockchain-enabled games".

The release also alluded to the possibility of the new division becoming an independently-listed entity, though it said that there is "no assurance any such potential spin-off will occur".

Atari said it was also creating a gaming division that will focus on "the expanding market of retro gaming".

The company's licensing division has already gone beyond the realm of the virtual with an agreement announced in March to build gaming-themed Atari hotels in Dubai, Gibraltar, and Spain.

Launched in California in the early 1970s, Atari is famous for its "Pong" table tennis game, widely regarded as the first video game to achieve serious commercial success.

The brand with its portfolio of more than 200 games and franchises was saved from bankruptcy in 2013 by French company Ker Ventures owned by Frederic Chesnais and American fund Alden.

Atari said Tuesday that Chesnais will relinquish his CEO post to head up the blockchain division and licensing while American Wade Rosen, currently chairman, will take over from his French colleague.

Despite disappointing results in the first half of the year, with revenues down 27 percent to 7.8 million euros, the share price has doubled since January 2021, valuing the company around 250 million euros.

Agence France-Presse