Today, it seems like successful multi-million dollar hacks have become an everyday occurrence. What’s more, it feels like it has something to do with the booming cryptocurrency industry more often than not.
However, this case is unique because it doesn’t involve a crypto exchange or wallet targeting gamers through crypto-jacking. Instead, the victim is Vulcan Forged, a gaming company dedicated to creating games and dApps (decentralized applications) based on blockchain technologies and using cryptocurrencies and other digital assets as key mechanics.
In most of its games, players compete against each other and the world to earn virtual currency, mainly in Vulcan Forged’s own PYR token and in-game items in the form of NFTs. Players can also buy, sell, or trade these in-game holdings with each other. As part of its services, Vulcan Forged offers “My Forge” for managing your account and crypto-assets as well as various online marketplaces.
NFTs (non-fungible tokens) are digital files with built-in ownership rights and are created using blockchain technologies. They can come in the form of any digital item, whether it’s art, sports cards, memes, videos, or audio. These files can be tokenized using blockchain technology and sold, traded, or handed down like any other digital asset. Proof and history of ownership are preserved and verified thanks to blockchain technology.
NFTs have well and truly exploded in popularity in recent months, going from $100m in trading in 2020 to topping $22bn in trading in 2021.
Some of the most popular titles in its blockchain gaming ecosystem are the MMORPG called “VulcanVerse” and a competitive card game called “Berserk.”
Everyday users ended up being the most severely impacted by the incident. Roughly $135 million was stolen directly from the holdings of individual users of Vulcan Forged’s services and games, or approximately 4 million PYR.
The good news is that Vulcan Forged claims to have provided refunds to cover nearly everything lost by its users. However, most crypto hacking incidents do not have such a happy ending, with users typically receiving no refunds and not having any recourse to reclaim damages.
The company was also quick to officially acknowledge the hack and promise refunds once the entire incident was understood. Soon after the hack, it urged users to move the contents of their wallets to Metamask.
The attacker has so far managed to cash out most of their stolen PYR by trading small amounts at a time. Due to the decentralized nature of cryptocurrencies like PYR, no centralized authority can prevent someone from cashing out stolen funds, even if it’s known to be stolen. Short of intervention from law enforcement, there is not much that Vulcan Forged themselves, or someone in the same position can do about it.
Vulcan Forged has been actively addressing the issue on its official Twitter account and Discord server. However, as of now, they have not revealed any details of how exactly the hack occurred and have declined to answer questions from various media outlets and news agencies.
This was not the end of the bad news for the crypto industry in 2021, with BitMart, a popular crypto trading platform, falling victim to a $196 million hack just a few days later.
Earlier in 2021, we saw what was likely the largest cryptocurrency hack in history. In August, it was revealed that hackers stole nearly $600 million by exploiting the Poly Network platform. In December, roughly $120 million was siphoned from the crypto wallets of BadgerDAO users. According to CoinTelegraph, 169 confirmed blockchain hacking incidents occurred in 2021, resulting in $7 billion in losses.