Stake Casino, a crypto gambling platform, falls victim in a $41 million crypto hack

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  • Stake Casino, a prominent online casino, was among the first franchises to adopt blockchain technology.
  • On September 4th, 2023, the online casino blockchain security experts announced a crypto hack, resulting in over $41 million in withdrawals.
  • Previously, payment provider Alphapo suffered a $31 million loss in suspicious withdrawals affecting several online casinos.

The Web3 industry has exponentially grown into several industries to fulfill its end goal of usurping the Internet or Web2. Today, blockchain technology has ushered in a new age of inventions. Developers have found ways to merge the least expected industry with its numerous functions. Despite its numerous applicability, its merger with the gaming industry is one of its most successful exploits.

Several sectors have integrated blockchain technology in unique ways, like NFT characters, in-game transactions, Play-as-you-Earn gaming experiences, and crypto casinos. The growth rate of online gambling has exponentially grown as organizations now incorporate crypto payment systems. Unfortunately, this rise has led to numerous crypto hacks over the years. In recent news, Stake Casino, an online crypto-gambling platform, recently fell victim to a crypto hack, resulting in the loss of over $41 million in digital assets.

Understanding who is Stake Casino and what is crypto gambling

When thinking about the gaming industry, many think of online games like Call of Duty, and the Sports and eSport industry. In actuality, the gaming industry encompasses multiple “sub” sectors, encompassing many of the entertainment we enjoy today. Casinos and online gambling also fall under the same category due to several similar traits. 

The notion of gambling existed before the digital age and was a game that thrived alongside the sports industry. With the evolution of technology, developers managed to digitalize the activity, and today online gambling is a standard activity amongst Sports enthusiasts.

Crypto gambling is no different from the former, the only difference is the currency used. Instead of a cumbersome fiat transaction system, most online casinos have introduced crypto payment services that support transactions made before and after the bet. The gradual rise in the value of cryptocurrency caught the attention of many online casinos. Soon enough, many opted to introduce crypto gambling as a better, faster, and more lucrative option.

crypto-gambling
Crypto gambling has significantly gained popularity due to its high value and transaction rate.[Photo/Medium]
Stake Casino, a prominent online casino, was among the first franchises to adopt blockchain technology. Ed Craven and Bijan Tehrani founded the platform in 2017 during the Golden Age of cryptocurrency. At the time, Stake Casino was among the first online gambling platforms that focused on introducing crypto payment services.

Also, Read Consensus Mechanisms in the blockchain world and how important they are.

This online casino is known for its fast gambling options ranging from slots, live dealers, games to table games, and original games. It also offers several crypto-gambling options that eventually ignited the age of crypto-based online casinos. Over the years, the platform has gained plenty of support from multiple brands and celebrities. Its affiliation with the gaming and crypto industry provided lucrative opportunities from both sides. Stake Casino accepts Bitcoin and 20 other crypto payment options, including the main altcoins like Ethereum and Dogecoin.

Its years of success, however, would become a double-edged sword for them. As a branch of the gaming industry, its standard operation yields figures in the millions, but adding its crypto assets, Stake soon became a target for crypto hackers.

Stake Casino lost $41 million after a crypto hack.

At the time of writing, Stake Casion shortly announced an unusually large withdrawal from their accounts. Unfortunately, they discovered the account in question had no previous activity hinting at a potential crypto hack. To further prove their suspicion, it only transacted in crypto coins, namely Tether and Ether. 

On September 4th, 2023, the online casino blockchain security experts announced a crypto hack, resulting in over $41 million in withdrawals. According to the Etherscam, the perpetrator may have used a stolen private key to access the casino crypto vault and transfer several digital assets without alerting the security measures.

The blockchain data revealed substantial withdrawals from the online casino contracts into the alleged attacker’s account. According to the report, at 12:48 p.m. the attacker transferred almost $3.9 million worth of Tether from Stake Casino. The following transactions removed 6,001 Ether worth $8.8 million at the current price. The attacker withdrew approximately $1 million in USD Coin, $900,000 in Dai, and 333 Stake Classic.

Stake Casino said, “Three hours ago, unauthorized actions 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.”

Stake Casino Co-founder, Ed Carven, said, “Stake keeps a small portion of its crypto reserves in hot wallets at any given moment for these very reasons.”

This statement implied that despite the loss, it only represented a small percentage of the casino’s total assets.

Also, Read Crypto gaming: The multi-billion industry of 2023.

According to Beosin, a renowned smart contract auditor, the attacker also targeted other platforms like BNB Smart Chain and Polygon. Both chains lost &17.8 million and $7.8 million respectively.

The online casino temporarily locked all its withdrawal and deposit services to curb further losses. Fortunately, five hours after the incident Stake Casino reponed their services and resumed their operations. They announced that their Bitcoin, Litecoin, and XPR wallets were unaffected, but are yet to disclose the main cause of the exploit.

Conclusion

Unfortunately, the crypto hack on the online casino is not a new occurrence. After the 2022 crypto crash, the entire industry has recently faced numerous crypto hacks over the past few months.

In July 2023, crypto payment services provider, Alphapo suffered a $31 million loss in suspicious withdrawals affecting several online casinos like Hypedrop, Bovada, and Ignition. Despite this recent crypto hack the industry has managed to maintain its steady incline.

Today, most regulatory bodies and governments have insisted that any crypto-based organizations seeking their market must have a rigid blockchain security feature. This trend has provided a positive trend among organizations as they ensure set security measures are in place to curb such crypto hacks from occurring again.

Also, Read African governments heavily invest in empowering the digital economy.

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Ken Mutuku
Ken Mutuku
I am an enthusiastic writer who believes that facts, knowledge and opinions can be expressed vividly with just a few words. I think that all forms of writing achieve this; hence I have a wide area of expertise and interest, such as cryptocurrency, psychology and the human mind.
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