A different kind of casino robbery
Crypto casino Stake has confirmed that its hot wallets were hacked, resulting in the infiltrators pilfering millions of dollars worth of cryptocurrency.
According to the company, the hacks occurred around 10:00am ET Monday morning. Before the confirmation, posted on X, cybersecurity firm Cyvers posted that it had detected “multiple suspicious transactions” involving Stake. In those instances, a total of around $15.7 million was withdrawn on the Ethereum network as the result of a “private key leak.”
ZachXBT, a blockchain enthusiast who specializes in investigation shady transactions and individuals, confirmed what Cyvers reported and added that an additional $25.6 million was pulled from Stake’s hot wallets and onto Polygon and the Binance Smart Chain.
Stake froze the affected wallets, but kept others, like Bitcoin, operational. The company assured users that all funds were safe. Early yesterday evening, Stake announced that everything was back to normal.
This is one of the big downsides of cryptocurrency. While those who swear by it love that it is decentralized and largely anonymous, it makes it much more difficult to – often impossible – to track down someone who steals cyberfunds. In this case, Cyvers said that the funds were converted to ether (Ethereum) and then transferred to external wallets. It is highly unlikely Stake will ever see that money again.
Stake has made a couple names for itself
Stake has risen to prominence over the last couple of years for a couple primary reasons. One is that it is a crypto casino. Because it uses cryptocurrency, users (read: gamblers in the United States) can get around laws governing financial transactions in gambling. Have a crypto wallet? There you go, you can deposit and withdraw to your heart’s content.
That ease of skirting financial restrictions leads to the second main reason why Stake has gotten big: it catered to streamers in the US. The biggest online gambling streamers in the world (non-poker) used Stake and, in turn, gave the casino millions of eyeballs a year. Those streamers included Drake, one of the most influential rappers in the world, who would often stream himself winning and losing hundreds of thousands of dollars – even millions – on Stake.
When Twitch implemented a ban on streams that featured unregulated online casino gambling in October 2022 – specifically singling out Stake and three others – many casino streamers migrated to upstart competitor Kick. Kick, not at all coincidentally, was founded that same month by the co-founders of Stake.
Kick has since signed several popular gambling streamers to gigantic deals for tens of millions of dollars. Though the site is almost certainly losing money, it likely just serves as a loss leader for Stake, getting viewers interested in gambling and nudging them over to the crypto casino.