Mixin Network suspends operations following $200m hack, the largest in 2023 

The crypto bear market has not deterred cyber criminals who continue to target crypto and DeFi platforms. The latest one to be attacked is the high throughput blockchain platform, Mixin Network in what researchers have described as the largest hack in Web3 in 2023.

According to online reports on Monday, the Mixin Network’s cloud service provider database was attacked by hackers on Saturday which resulted in the loss of around $200 million.

The decentralised peer-to-peer network confirmed in a disclosure published that it incurred a loss of roughly $200 million in digital assets. It further stated that the exploit is still under investigation but it has however suspended deposits and withdrawals for customers.

Mixin describes itself as an “open and transparent decentralized ledger, which is collectively booked and maintained by 35 mainnet nodes.” 

Read also: Crypto exchange Huobi (HTX) loses $8 million to hack 

In simpler terms, the Mixin Network is a decentralized exchange and cross-chain network that allows users to transfer digital assets. According to its website:

“We build open source software that always puts security, privacy and decentralization first.”

It is however confusing how hackers were able to get access and steal money from Mixin’s database considering the fact that on paper, the platform is decentralised.

How the Mixin hack happened

The $200 million loss is a result of a cyberattack that took place on Saturday which compromised the database of a third-party cloud service provider, according to an announcement by Mixin on X (Twitter).

The firm stated that it had enlisted the assistance of blockchain security company, SlowMist and tech giant Google to help in the ongoing investigation and potential asset recovery.

Further details about the incident were disclosed by Web3 SaaS analytics platform 0xScope. It revealed a previous interaction between the suspected hacker’s address, identified as 0x1795, and Mixin Network. The address received 5 ETH from Mixin in 2022, which was later deposited into the Binance exchange. 

0xScope analysts suggested that the hacker converted the stolen USDT to DAI, probably to circumvent potential fund-freezing measures. 

Mixin Network stated that deposits and withdrawals would resume once all vulnerabilities have been confirmed and resolved. However, it is important to state that the company has yet to announce a detailed plan to recover the lost assets for its users.

Incessant hacks 

This episode adds to the existing discourse on the security challenges facing blockchain platforms, particularly as substantial sums are involved. 

Related post: 3 helpful tips to avoid hacks from Lazarus Group and other crypto thieves

There have been various large hacking incidents targeting crypto platforms this year, many of which are reported to be caused by the notorious North Korean-affiliated Lazarus Group. Roughly a week ago, Balancer was subjected to an exploit after an initial attack and  Solana’s Cypher Protocol was hit with an exploit with damage ranging around $1 million. 

Also, earlier on Monday, we reported how one of the most prominent crypto exchanges, HTX (Huobi) was at the centre of an $8 million security breach. According to a report by blockchain analytics firm, Cyvers, Huobi Global’s HTX crypto exchange was hacked on Sunday and a total of $7.9 million worth of crypto was drained in the attack.

Although Huobi (HTX) claims to have fully covered the losses, it brings to the fore the vulnerabilities of the crypto space which has suffered too many breaches in recent times.