Crypto Gambling Site Stake Resumes Services After $41m Hack

  • Betting company Stake lost more than $41m from a “private key leak”
  • The exploit resulted in unauthorized transactions from Stake’s hot wallets
  • The Australian casino and sportsbook is now back up and running
System hacked screen
Stake has lost $41m worth of crypto currency from its wallets after a system hack. [Image:]

Unauthorized transactions

Cryptocurrency gambling company Stake has resumed all services following a $41m exploit resulting from a “private key leak.”

On Monday, Stake confirmed on X (formerly known as Twitter) that the company was investigating the hack:

Stake later confirmed that services had resumed and “deposits and withdrawals are processing instantly for all currencies.”

In the follow-up to the hack, Stake issued an “emergency compensation refund” for users who lost funds during the exploit to help restore “market sentiment.”

How much was stolen?

According to blockchain security company Beosin Alert, $41.35m was stolen from Stake’s platform. Of that figure, $15.7m was Ethereum, $7.8m Polygon, and $17.8m BSC. After draining the funds, the hacker deposited them into several accounts. 

the withdrawal of $3.9m worth of stablecoin Tether from Stake

The first transaction occurred at 12:49pm UTC, resulting in the withdrawal of $3.9m worth of stablecoin Tether from Stake. The hacker continued removing funds, including 6,000 ETH, amounting to $9.8m, $900,000 worth of Dai, and $1m in USD coin.

Even though the amount was a significant figure, Stake’s co-founder Ed Craven said the company keeps a small amount of crypto reserves in its hot wallets for these types of situations.

A Financial News report states that Stake made $2.6bn in revenue in 2022. The company has grown substantially thanks in part to its advertising on streaming services, such as Twitch. Stake started its own streaming site called Kick late last year. It has since drawn in several major names in content creation.

Crypto and gambling

While Stake has linked crypto and gambling by allowing users to wager with their coins, governments around the world are considering whether they should categorize crypto trading itself as a form of gambling.

the UK government has no plans to categorize it as gambling

In the UK this year, for instance, a report from the House of Commons Treasury Committee determined that crypto trading resembles gambling. Despite the report’s findings, the UK government has no plans to categorize it as gambling for regulatory purposes.

According to Economic Secretary to the Treasury Andrew Griffith, taking this action might blur the lines between gambling and financial regulators. Griffith admitted that the UK Gambling Commission doesn’t have the expertise to deal with crypto, however.

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